Gold clocks fresh 27-month high

Broad based risk aversion in the financial markets pushed gold to a fresh 27-month high of $1370.40/Oz levels.

Safe havens rally

Traditional safe haven assets –gold, treasuries and government bond yields, Yen – strengthened in Asia on flight to safety. Moreover, the risk-off trade gathered pace after the GBP/USD pair dipped below 1.30 levels.

Investors fear the Brexit shock is pushing the global economy into recession. Consequently, markets have begun speculating about a Fed rate cut this year. No wonder gold rallied to its highest since March 2014. At the time of writing, gold was trading just short of $1270/Oz levels.

Gold Technical Levels

The immediate hurdle is seen at $1380 (38.2% of 2011 high – 2015 low), above which prices could test $1400. A break higher could yield $1433.73 (Aug 2013 high). On the other hand, a breakdown of support at $1358 (previous month’s high) would open doors for $1328 (expanding channel support). A violation there would expose $1300 handle.