Gold extended to the upside to start the week, moving within striking distance of $1600 as both the U.S. and Iran rattled their sabers. The yellow metal reached a high of 1587.77, a level last seen in April 2013.
The Fibonacci objectives mentioned in Friday's post at 1586.66/1587.37 were satisfied before the yellow metal adopted a modestly corrective tone. However, with more than 61.8% of the entire correction off the all-time high set in 2011 now retraced, considerable credence has been returned to the long-term uptrend.
The Iranians have promised retaliation and the U.S. is already moving additional troops to the region. President Trump has threatened that "should Iran strike any U.S. person or target, the United States will quickly & fully strike back, & perhaps in a disproportionate manner."
The U.S. assuredly has Iranian military units and facilities under very close surveillance. While it seems unlikely that the Iranians would dare strike against the U.S. or our allies in the region, Iranian proxies may not so rational.
The risks of conflict are very real and those risks are likely to persist for some time. That should provide continued support for gold as a safe-haven with sights on the next Fibonacci objective at 1625.93.
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