AngloGold Eyes Breakout: Channel Holds as Gold Slips on Iran Ceasefire Hopes

Quick overview

Gold fell despite Middle East tensions, a rare move for a safe-haven asset. The sell-off came after Iran signalled they were interested in a ceasefire, easing fears of a wider conflict after initial concerns of US intervention had sent gold higher. As gold fell, AngloGold Ashanti (JSE: ANG) also lost momentum, with traders taking profits ahead of clarity.

Gold’s behaviour in recent weeks is showing it’s becoming more headline driven. Rather than following a straightforward uptrend during crises, prices are whipsawing – adding pressure to miners like AngloGold that rely on stable demand and good margins.

Fed Uncertainty Adds Volatility

Markets are now looking to the US Federal Reserve. Investors are cautious as speculation grows over whether the Fed will hike in 2025. For gold, this is a threat: higher rates reduce the appeal of non-yielding assets and any hawkish surprise will further suppress gold demand.

This has made traders hesitant to commit to gold stocks, including AngloGold. Key concerns currently weighing on sentiment:

• Fed to hike in 2025
• Iran ceasefire rumors pushed gold below key levels
• Stronger US dollar makes gold less valuable globally

These headwinds combined with fluctuating risk appetite have left AngloGold trading in a tight range despite fundamental support.

Technical Chart Remains Bullish

Despite the macro noise, the technicals for AngloGold remain constructive. The stock is trading in a rising channel on the 2-hour chart, with a series of higher lows and higher highs since late May. After testing resistance at 87,918, price action pulled back to 86,000 where a spinning top candle indicated indecision.

But key support levels remain firm:

• 50-period EMA at 84,187 is holding as support
• The trendline from early June is unbroken
• MACD is short term cooling but no bearish reversal pattern has formed

AngloGold Trade Setup:

If AngloGold holds the 85,000-84,000 zone and prints a bullish engulfing candle, we can target 87,918 and then 89,894. A break above 89,894 opens up 91,934. A stop-loss below 84,000 protects against downside if the trendline fails.## Rand and Retail Data Provides Local Boost

And to add to the mix, the rand recovered on Wednesday, erasing Tuesday’s 1% loss. Retail sales surprised to the upside with a 5.1% year-on-year increase in April. Economists expect inflation to ease and consumer strength to persist due to better real wages.

This helps AngloGold’s local operations but a stronger rand reduces USD-converted export revenue – so it’s a double-edged sword. Local resilience may help the miner ride out global volatility but currency strength is a problem.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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