How Geopolitical Risks Affect Gold and the Dollar

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Part 5
How Geopolitical Risks Affect Gold and the Dollar PART 5 OF 8

Gold Rose above Its 200-Day Moving Average: Technical Insights

Gold technicals

As anxiety surrounded investors on Tuesday, April 11, 2017, gold broke its 200-day moving average mark and rose 1.6%. After touching the day’s high of $1,275.10 per ounce, it closed at $1,272.50 per ounce.

Gold’s call-implied volatility rose to 14.9%. Call-implied volatility measures the changes in the price of an asset with respect to the variations in the price of its call option.

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The active gold bulls could be looking at a further upside for gold. Its technical resistance was seen first at $1,280.00 and then at $1,300.00. Gold may find support at its 200-day moving average price of $1,260.00.

Other precious metals

Silver rose 1.9% and ended April 11 at $18.30 per ounce after touching its high of ~$18.40. Silver may find strong support at $17.50 and resistance at $18.50.

Platinum was the winning precious metal and rose 2.9% on April 11, ending the day at $966.20 per ounce. Palladium rose ~1.7% and closed at $803.00.

The chart above depicts the comparative price performance of gold and silver funds over the past two months. The SPDR Gold Shares ETF (GLD) and the iShares Silver ETF (SLV) are known to closely follow their respective metals. These two have seen year-to-date gains of 10.6% and 14.6%, respectively, on a year-to-date basis.

The rise in these precious metals also boosted miners Primero Mining (PPP), AuRico Gold (AUQ), Newmont Mining (NEM), and Goldcorp (GG), which rose 0.79%, 3.6%, 1.5%, and 2.8%, respectively.


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