On Tuesday, we saw a spike in precious metals as investors moved to safe haven assets in the wake of another missile test by North Korea.
As an extension of that, we also saw heavy trading volume in JSE mining companies.
The screener below shows a list of high volume traded JSE securities and as you can see, the mining companies are at the top of the list with movement of up to 8% on the day.
We also saw a significant rise in Gold on Monday, due to a weakening Dollar as well as the Federal Reserve descision to move slower on further interest rate hikes.
Assuming that the North Korea situation does not escalate, we could see a slight decline in metal prices over the next day or two.
The stochastics Oscilator is also approaching an overbought scenario adding confluence to a possible short term reversion.
We would need to remain cognisant of the $1300 level.
A break below this level and we could see the price back at the $1260 support area.
Should the precious metal remain above the $1300 support area, we could see the price return to the $1370 resistance area.
From a human perspective, let’s sincerely hope the situation in North Korea does not intensify and that the rise and fall of gold is based on “financial” geo-political risks, as opposed to the threat of war.