Gold Jumps on Safe Haven – Bullish Butterfly Plays Well!

Posted Wednesday, October 3, 2018 by
Arslan Butt • 1 min read

Recalling our earlier forecast Gold Takes A Bullish Turn – Bullish Butterfly In Play, the precious metal has traded exactly in line with our forecast. The bullish butterfly pattern was suggesting a sharp bullish movement in the market and traders reacted on it.

Most of the bullish trend was triggered due to weakness in the dollar and boosted demand for the safe-haven metal on concerns surrounding Italy’s plans to tackle the budgetary deficit. The risk appetite was fueled after the European Union (EU) officials expressed anxieties about Italy’s budget plan, which would extend the deficit significantly. The deficit gap revived fears of the Eurozone debt crisis. In response to this, investors tried to take shelter under safe-haven gold.

Gold – 3 Hour Chart

For the moment, gold is trading in the overbought zone. The RSI value is holding above 80, signifying the bulls may get exhausted and sellers may jump in to catch the retracement.

Considering this, gold can drop to 38.2% Fibo retracement level of $1,200 and 61.8% level of $1,196 today. Good luck!

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About the author

Arslan Butt is our Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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