Gold Pushes Further Above $5,000
Gold strengthened again and moved further away from the psychological $5,000 level on Friday (February 20th), although its movement throughout the week remained volatile. Gold futures rose $43 (0.9%) to $5,040 per ounce, confirming the market's recovery efforts above the level that has been a major concern.
However, gold's weekly performance remains unconvincing. Throughout the week, gold has fallen by around $9.50, potentially breaking its two-week winning streak. If this happens, this would be the biggest weekly decline since the week ending January 30th, when gold fell 4.7%.
While gold continues to trade pressure, silver has performed stronger. Silver prices jumped 3.7% to $80.52 per ounce. On a weekly basis, silver rose around $2.30 (2.9%) to $80.26, extending gains for two consecutive weeks and potentially marking its best weekly gain since the week of January 23 (when silver surged 14.45%).
Commerzbank analyst Thu Lan Nguyen believes that gold and silver are currently well below their January peaks, but the risk of an escalation in the US-Iran conflict could provide fundamental support. The market is also monitoring reports that the US is considering a limited strike to pressure Iran to reach a nuclear deal.
On the other hand, geopolitically, talks between Ukraine and Russia have so far shown no significant progress toward peace. This situation has kept safe-haven sentiment alive, so gold is considered to still have a cushion of support, even if its gains have not always been smooth.
However, there is also a view that the US-Iran issue is not yet strong enough to immediately push gold back into a major rally. Trade Nation analyst David Morrison said that gold may need more consolidation for momentum indicators like the MACD to return to neutral. He even warned that the previous peak could be a temporary ceiling—while the metals market also tends to be quieter due to the Lunar New Year holiday, which reduces participation by Asian traders.
5 key factors below
Gold rose 0.9% to $5,040, edging further above $5,000.
However, on a weekly basis, gold is still down ~$9.50 and could potentially break its two-week uptrend.
Silver was stronger, rising 3.7% to $80.52 and up 2.9% weekly.
The risk of a US-Iran escalation (including talk of a limited attack) supports the safe haven.
Some analysts believe gold still needs consolidation before its next rally; the market is also quiet due to the Lunar New Year holiday.
