Gold prices are trading towards their six months high as investors factor in all the risk despite the fact that we have seen a stellar rally in the equity markets yesterday. There has been some progress on trade talks between the US and China nonetheless, investors are still interested to park some of their money in gold ETF. The gold ETF holdings having been exploding since October and the chart below shows that there is still no shortage of momentum.
If you really want to measure the risk appetite with respect to Brexit, just look no further than gold price in the British pound, it has surged above the 1K pound an ounce mark for the first time since September 2017. Clearly, investors are hedging their bets ahead of the big vote in January.
In terms of technical analysis, we do think that the path of the least resistance is skewed to the upside. We are maintaining our end target of 1275 and the price has already touched the high of 1272 today. In terms of support, I think the support at 1250 is very solid.
