Market News & Analysis

Top Story

Gold drops to key support as Middle East fears subside

Crude oil and gold both fell further and stocks rallied after the US President made no mention of military action against Iran and called for peace. Donald Trump added that Iran "appears to be standing down" after Tehran hit air bases housing US forces in Iraq in retaliation to the killing of Iranian General Qasem Soleimani last week. However, it remains to be seen whether the situation will now de-escalate further or we see further response from Iran.

Following Trump’s speech, gold fell back to retest the highs from last year and key support around $1555, where it bounced back slightly. The buck-denominated safe-haven metal was also hit by a surging US equity market and a rebounding dollar. The latter found support on the back of a solid jobs report from the AFP. This showed private US non-farm payrolls rose by more than 200 thousand last month, some 40K more than expected. If this is anything to go by, then Friday’s official non-farm payrolls report could beat expectations again.

Still, regardless of what happens in the short term, I remain fundamentally bullish on gold because of an overvalued US stock market and central banks’ desire to keep global interest rates at these extraordinary low levels. What’s more, there is the potential for the US-Iran situation to escalate.

Technicality, the above-mentioned $1555 level is pivotal and for as long as price holds above it, the potential is there for gold to extend its rally further despite the apparent de-escalation of the US-Iran situation. But if gold were to go back below the $1555 level and hold there then this could mark the end of the rally - at least for a while. In that case, we may very well see a correction before the rally potentially resumes at some point down the line. So, watch price action around $1555 closely this week.

Source: Trading View and City Index.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.