Gold Prices Trending Sideways – Are You Ready for Choppy Trading?
The trading sessions are a bit slow as the market enjoys summer holidays. So, we aren’t seeing any major movement in the market. Same is the scenario for gold, it’s been stuck in a narrow trading range of $1,207 – $1,215. But we still can place a position to benefit the choppy market. Watch out the trade plan…
Gold – XAU/USD – Fundamental Outlook
There are two major things which are confusing the market.
1 – The U.S. China Trade war is still on and it’s keeping the market uncertain. Overnight, Washington announced that it would inflict a 25% tariff on $16bn of Chinese imports, bringing the total amount being targeted to $50bn. The new duty will be in action on August 23 and will apply to 279 product types.
As a result, the stock markets are coming under pressure causing investors to move their investments to some safe assets such as gold and silver.
2 – The Fed’s two additional rate hike sentiments are underpinning the dollar and ultimately placing a bearish pressure on gold. This is another reason why investors are not placing bullish positions in the gold.
Gold – XAU/USD – Technical Outlook
The technical side of the market is still the same. Gold is trading below a descending triangle pattern to face resistance near $1,216 and that’s where I will be looking to take a sell position.
Gold is still holding below 100 periods of MA which is likely to provide it solid resistance near $1,222. For the moment, the RSI and Stochastics are directing a bullish trend.
Investors are advised to keep a closer eye on $1,216 as the markets can stay bearish until $1,207. Whereas, the bullish breakout of $1,216 can lead gold prices towards $1,220.
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