Vantage FX (www.vantagefx.co.uk) investigate how geopolitical influences can change market moves.
Geopolitical Week
We are looking at a 4-hourly gold chart from August onwards to see how trends are not always caused by news, but can also build before news occurs. As tensions in Syria escalated throughout August, we can see that the price of gold started out at an interim low of $1275 on 7 August, then rallied up to $1345 mid month. Gold reached a peak at $1433 on 28 August, then went downhill as British PM David Cameron was defeated in Parliament on the 30th. There was a bounce up on 4 September as French PM Hollande supported Obama. As it became clear that public opinion was against the war, we see a V shaped reversal so that we are now back to where we were in mid-August. By looking at a daily chart, however, we can see that on 28 August we had retraced exactly half of the decline and it is clear that the move started long before talk of strikes on Syria.
