Extreme weather conditions in Texas due to Hurricane Harvey combined with North Korea’s newly launched ballistic missile over Japan this morning to trigger a new wave of the hunt for safety.
The gold price surged to its highest level since the November election and closed above the US$1,300 mark for the first time in nearly 10 months. The Japanese yen strengthened nearly 0.7% against the US dollar, to the 108.8 area this morning.
Crude oil prices are sinking as many refinery sites were closed due to Hurricane Harvey, delivering a negative impact to the economy. The damage brought by Harvey, which includes the cost of rebuilding, insurance and loss of jobs, is devastating.
Asian equities opened mostly lower and the S&P 500 futures gapped down by nearly half a percent this morning. Pyongyang’s decision to launch another ballistic missile today is a threat to the region’s security, presenting a challenge to US efforts to pursue a diplomatic solution to the nuclear tension.
Technically speaking, the three US indices have entered into a technical correction since early August, and this trend has shown no sign of reversing yet. External factors – such as extreme weather and geopolitical tension – continue to weigh on market sentiment, and could potentially pave the way for a deeper correction. Similarly, Asian markets such as Singapore and Japan are also likely to be under pressure.
Gold - Cash
- Breakout key resistance level of US$1,295, which will become a support level
- 10-Day Simple Moving Average sloped upwards
- SuperTrend (10,1.5) is sloped downwards, suggesting more upside
- Momentum indicator MACD attempted higher high, indicating strong upward momentum
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