Gold hits one month high on market uncertainty

Gold hit a one-month intraday high on Thursday as equity markets continued volatile trading in the face of global growth concerns and ahead of Fed Chair Janet Yellen’s speech after the US market close.

Major global stock markets initially dropped sharply early on Thursday before paring much of those losses later in the trading day. Despite this partial rebound for stocks, gold continued to remain strong as many investors flocked to the precious metal as a safe haven.

The price of gold reached an intraday high of 1156.46 on Thursday, just slightly edging above the 1156.37 high on August 25^th, before falling back slightly later in the day.

With equity markets continuing to be pressured by uncertainties surrounding global growth, gold could further benefit as it continues to attempt a recovery from the summer’s multi-year lows.

While the longer-term 200-day moving average is still pointing to the downside, the shorter-term 50-day moving average has recently begun to turn back to the upside after having consistently sloped down for the past four months.

Thursday saw a clean breakout above the key 1140 prior resistance level. With further momentum on the current rally, gold could reach up towards the next major resistance target at the important 1170 level, which was tested back in late August. That key resistance objective is also where the 200-day moving average is currently situated. A further upside target on any continued flight to gold resides at the 1200 psychological level, which was last reached in June. Short-term downside support on any pullback continues to reside around the 1100 level.