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Gold prices accumulate around the 2018 range's 61.8% Fibo on flash crash risk flows

  • Gold spiked and reversed on the back of the flash crash that took place in early Asia.
  • Gold is back trading at $1,286/oz, but it has been as high as $1,290/oz. 

Gold took up its usual safe-haven bid on the back of the flash crash in the FX space during illiquid early Asian on Wednesday. We have seen big moves in currency prices, especially AUD/JPY which has rallied back the majority of the downside now as markets adjust. Let's see what comes from the BoJ today on the strength of the yen.

Continued concerns about economic expansion

Before the crash, the North America session was actually driving supply onto the screen due to the strength in the greenback following China PMIs slipping into contraction which sparked a flight to safety that eventually benefitted the greenback. Futures made their highest settlement since the middle of June, though well below the session’s high of $1,291/oz. Gold prices ended up 4.6% in December and 7.2% higher for the final quarter of 2018. Continued concerns about economic expansion and volatility in stocks should support demand for havens.

Gold levels

RSI still has room to go until it meets prior highs for 2017 and 2018 levels. The 2018 50% Fibo level at 1262 was a key target which has been breached and so too has 1287 as the 2018 61.8% Fibo. On the flipside, the 21-D SMA is now found down at 1255, with the confluence of the 200-D SMA. 

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