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Gold has more upside potential
Commodities
08/13/2019

Gold has more upside potential

Global equity markets are broadly lower again on Tuesday, with safe-haven gold retains support amid regional fears.

Global equity markets are broadly lower again on Tuesday, with safe-haven gold retains support amid regional fears. Continued political tensions in Hong Kong coupled with a plunge in the Argentina’s peso after voters signaled they could reject market-friendly President Mauricio Macri at an election in October, unnerve investors, in addition to lingering trade concerns.

Against this backdrop, demand for gold persists, with the bullion jumped to fresh six-year highs just below $1,1525. The technical picture improved further after a break above the $1,500 handle, and the bullion could go even higher despite overbought conditions as risk-off sentiment prevails in the global financial markets.

In the short-term, however, the precious metal may face a risk factor in the form if the US CPI report. Should the data come in line with expectations or exceed the forecast, the greenback could stage a short-lived rally across the board. In a wider picture, gold prices will likely remain within a firm uptrend as trade tensions between the US and China are far from being resolved, and the escalation may take place at any moment.

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