Sideways Trading In Gold – Trade War Tension Escalates
Arslan Butt • 1 min read
On Monday, gold began trading in a bearish tone despite the trade war sentiments. The trade war sentiments escalated during the weekend because of the comments made by POTUS (President of United States). Trump is thinking of listing China’s investments in U.S. companies as a threat to economic and national security. That’s the same with European Union’s car industry.
Over the weekend, POTUS fueled trade war sentiments by threatening to impose a 10% tariff on $200 billion worth of Chinese goods and a 20% tariff on all European assembled cars entering the U.S. markets. This move has caused confusion in the market about whether to short gold on the stronger dollar or to buy it because of safe-haven demand.
Gold – XAU/USD – Quick Technical Update
Technically, gold is facing a strong trendline resistance at $1,271 along with a support near $1,261. The 50 – periods EMA is also suggesting a bearish bias of investors.
The violation of $1,271 resistance on the upper side can lead gold prices towards $1,276. Whereas below $1,271, the market can stay bearish until $1,262.
Gold – XAU/USD – Trade Idea
I’m placing my sell limit near $1,271 with a stop near $1,274 and open take profit to capture 50/60 pips. On the other hand, my buying limit is $1,261. Good luck!