Gold is nearing pullback territory after rallying for five consecutive days, IG market analyst Tony Sycamore has warned. The precious metal reached a fresh record above $US3895 an ounce amid the US government shutdown. According to Sycamore, the Supreme Court’s decision to block President Donald Trump from removing Federal Reserve governor Lisa Cook until January next year may also impact gold prices.
Sycamore suggests that the Supreme Court’s ruling could ease concerns regarding the central bank’s independence. It also reduces the likelihood of another dovish appointment to the Federal Reserve Board. “This removes, for now, two key factors that had supported gold’s run towards $3900,” Sycamore stated on Thursday, indicating a shift in market dynamics.
“With gold well and truly in overbought territory – this development sets the stage for [a] pullback in gold, toward the $3780 level,” Sycamore added. Investors should monitor gold’s performance closely as it approaches potential support levels, considering these recent political and economic factors that influence its trajectory.
