Gold Testing Crucial Level – Check out the Weekly Outlook
The yellow metal gold dipped on Wednesday as the Greenback strengthened against its peer currencies after the United States threatened to inflict further tariffs on Chinese goods, intensifying trade tensions among the world’s two biggest economies.
In addition, the rate hike sentiments led the US. fund investors to pull $1 billion from commodity funds, including those invested in the precious metal. It’s the largest withdrawal since July 2017.
Stronger Dollar Plays
A stronger Greenback makes bullion costly for residents of other currencies as the commodity is valued in terms of the buck. Due to gold’s negative correlation with the dollar, the investors have triggered commodities lower.
Gold -XAU/USD – Weekly Outlook
The yellow metal is showing a very interesting setup on the weekly chart. Let’s break down the technical aspects of gold.
- There’s a bullish trendline which is supporting the pair near $1,237.
- 200 periods moving average is also supporting gold near $1,237.
- The same level $1,237 also supported gold back in April 2017 and in July 2018.
- The leading indicators, RSI and Stochastics are massively oversold and are holding below 20.
Is there any chance of bullish reversal?
Yes, there’s a nice chance of bullish reversal but we should wait to see this week’s closing. A weekly close above $1,237 can give us an opportunity to capture retracement in this safe-haven asset until $1,275. Good luck!
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