Commodity Update: Gold – 29 August 2014
Gold rose this week following a sustained period of losses. The key driver behind the metal’s recovery has been further gains by insurgents in Iraq and Syria, as well as the ongoing escalation of the conflict in Ukraine.
In detail, the week saw yet more acts of savagery from insurgents in Iraq and Syria prompt further calls for action from the international community.
This was while reports continued to emerge of Russian involvement in Ukraine and an open display of support, from Vladimir Putin, for rebels in the eastern region led US government officials to call for more sanctions.
Despite a stronger economic performance from the US, as well as the current trajectory of global equity indices, the geopolitical environment combined with events in the middle east represent a situation that is still very much conducive to higher levels in gold.
With the metal having failed to sustain a break below key support at $1278 during recent weeks, we now expect a period of bias toward the upside for spot prices, with risks emanating from Eastern Europe and the middle east as the key driver behind this.
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