No overhead resistance above and $1,700 per ounce is less than $10.00 away

The gold price traded higher Sunday night, gaining $25.50 to $1689.25 per ounce. The price of gold spiked higher in reaction to the news late Friday that Standard & Poor’s downgraded the United States credit rating to AA+ from AAA – stripping the U.S. of the top rating it held for 70 years. The move prompted the European Central Bank to begin “actively” purchasing sovereign debt of Euro-zone nations.

The S&P 500 sank 7.2% last week and has now plunged nearly 200 points, or 13%, from peak to trough in a short two weeks. Stocks in the U.S. have fallen for nine of the past ten sessions. Meanwhile, the yield on the 10-year U.S. Treasury bond fell as low as 2.33% on Friday and the CBOE Volatility Index (VIX) soared toward the 40 level. The Reuters-Jefferies CRB Index touched its lowest level in seven months. The gold price rose $37.20 last week, making it one of the only asset classes outside of Treasury bonds to move higher.

Fear is back.

S&P 500 stock futures opened dramatically lower, sinking 29.10 to 1168.70 at 6:30pm eastern time Sunday night. With the gold price posting yet another all-time high, there is no overhead resistance above and $1,700 per ounce is less than $10.00 away.

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