Top 3 Reasons for Bullish Gold – Can We Expect $1,364?
Arslan Butt • 1 min read
Gold prices are touching a five-week high near $1,353 as the escalating fears of a trade war between the US and China are hiking the level of uncertainty in the market. As we know, where there is uncertainty, there is Gold. So, can we expect $1,364 today? Let’s find out…
Gold – XAU/USD – Safe Haven Appeal
Traders, the only reason behind a bullish Gold is the safe-haven appeal. I see three reasons for this bullishness:
1 – Despite the interest rate hike from Fed, the Dollar is getting weaker. It’s mainly because the 1.75% rate was widely expected and already priced in.
The FOMC dot plot failed to surprise the market with 4 rate hikes in the 2018.
2 – Secondly, the escalating fears of a trade war between the US and China have seen investors rushing to gold. Most of the US businesses who were importing goods from China are likely to suffer significantly. The trade war is causing a threat of a slowdown in business activity, profits, and sales.
Ultimately, the dollar is likely to suffer over this.
3 – Lastly, the nomination of John Bolton as US President Donald Trump?s new national security adviser, who is deemed a foreign policy ?hawk?, could heighten geopolitical tensions, adding to the uncertainties for investors.
Gold – 4 – Hour Chart
Technically, Gold is facing solid support near $1,351. The RSI and Stochastics are coming out of the oversold zone. This signifies a bullish bias with investors. However, the yellow metal is likely to face an immediate resistance at $1,355 and a break above this can open further room for buying until $1,360.
GOLD – XAU/USD – Trading Idea
The idea is to stay bullish above $1,351 with a stop above $1,347 and to take profits near $1,357 and $1,364. Good luck!