Harmony Gold Mining Company Ltd (JSE: HAR) started the week on a high note, rising over 1.7% as safe-haven demand for gold surged due to escalating Middle East tensions. This gain further cements the stock’s impressive year-to-date performance, currently sitting at over 8% in positive territory.
The recent drone attack on US forces in Jordan and missile strike on an oil tanker off Yemen’s coast have rekindled anxieties, driving investors towards the safe haven of gold. This bodes well for Harmony, which stands to benefit from increased demand for the precious metal.
On the company front, Harmony’s production guidance remains unchanged for FY24 despite exceeding expectations in the first half. The company delivered between 820,000 and 835,000 ounces of gold in the six months ended December 31, 2023, exceeding the guided range. This strong performance was driven by higher grades at its South African mines and a robust showing from Hidden Valley in Papua New Guinea.
Technical
The daily chart shows that the share is currently trading at R123.32 on Monday, trading higher as safe-haven-driven demand looks to push the price action above the horizontal trading zone. The price action stands above the upward-sloping 50-SMA (blue line), 100-SMA (orange line), and 200-SMA (red line), indicating sustained bullish momentum. The RSI at 67.52 further confirms this trend, although it is nearing overbought territory.
The price action currently hovers just above the horizontal trading range ceiling at R120.86. A decisive break and close above this level could pave the way for further ascent towards the next resistance zone at R128.84 and, ultimately, R137.57.
However, should the price fail to find buyers above, a retracement back within the range and towards the 50-SMA-backed 61.80% Fibonacci retracement level (R111.62) could materialize. A break below the golden ratio would leave the R104.37 and R94.63 price levels as the next levels of significance in the short term.
Summary
Harmony Gold shines brightly, fuelled by safe-haven demand and operational reassurance. While the impending Fed decision adds a layer of uncertainty, the technical picture hints at further upside potential on a successful break above R120.86, with R128.84 and R137.57 as key targets. However, the RSI position near overbought levels and a potential retracement zone around R111.62 warrant cautious optimism.
Sources: TradingView, Trading Economics, IOL, Market Beat, Reuters, Dow Jones Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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