AS risks of war between US and North Korea rose last week, gold price had risen to a new high as investors looked for what they called “safe heaven.” But will this trend keep going and if so what’s the target, analysts have the answer.
Gold price came down from its peak of US$1,772/oz in October 2012 to the low of US$1,049/oz in December 2015.
Technical analysts said gold is now already in the uptrend and has just entered its bullish stage. Last week, with the tension in Syria and North Korea rising, gold price jumped to nearly US$1,292/oz.
The price has gone down a bit after US softened its stance this week with its warships losing its way from near Australia to its intended Korean peninsula without specific reasons although Sputnik’s news headline said: US Supercarrier Carl Vinson Went Off Course Because White House, Pentagon Miscommunicated.
And technically, what’s the uptrend target? They said according to their Fibonachi Projection, the targets could be US$1,645/oz or at its best US$1,968/oz.
Now fundamentally, any factors to support those uptrend? They said this year there are geopolitical risks in that firstly there will be elections in the Netherlands, France and Germany, secondly Brexit has started and thirdly US President Donald Trump might do something to increase conflicts which could lead to war with North Korea, China and Russia.
And with higher inflation worldwide, people may switch to gold while the new markets like Shanghai Gold Exchange might increase gold demand as well. Over 200 Japan pension funds are also aiming to invest more in gold.
But the most important catalyst of all is the changing in Shariah Gold Standard’s rule to allow Muslims to invest in physical gold. There are over two trillion US dollars in Islamic finance available, said Thongchai Na Chiangmai.
Top: Glittering gold coins. Photo: Anthony Joh (CC-BY-2.0)
By Kowit Sanandang