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. 

Technical Analysis:

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

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.