Gold showing the characteristics of a real store of value
It seems a bit dull moving from bitcoin to gold even though the latter is making headlines of its own after soaring – by its own standards – in recent weeks.
Some may like to think of bitcoin as gold 2.0 but days like we’ve seen recently perfectly highlight just how ridiculous that is. How can something be a store of value and a safe haven when it’s price can change so rapidly and aggressively, it just can’t.
Given everything that we’re seeing at the moment, gold is very much displaying the characteristics it’s been long associated with.
As the Federal Reserve prepares to cut rates, global economy faces a slowdown and tensions flare in the middle east, the safe haven, inflation hedge and store of value is performing admirably.
Gold Daily Chart
It may not have held on to earlier gains today, which may be a sign of near-term weakness, but it remains strong overall. Of course, a deal at the weekend may change things but for now, traders appear quite bullish.
$1,400 continues to hold as support but the failure to make a new high makes this increasingly vulnerable. A break of this level though may simply mean a larger correction is on the cards, rather than suggesting that gold has peaked.
Below here, $1,365-1,375 could look interesting, having been so last time gold traded around these levels. This falls around the 38.2% retracement of the move from the recent low to the peak, adding an extra level of interest.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.