Gold Violates Psychological Level of $1300 – US Government Reopens
Arslan Butt • 1 min read
On Friday, the precious metal gold soared over 1% to cross above the psychological trading level of $1,300. The bullish trend in gold was triggered after a sell-off in the Greenback for two major reasons:
- The dollar slipped ahead of a US Federal Reserve meeting next week where the central bank is widely expected to leave interest rates unchanged
- Investors boosted safe-haven appeal over the continued partial shutdown of the US Government.
US Government Reopens
The US government has re-opened momentarily after the most prolonged shutdown in American history. It’s been closed for more than 35 days and has finally opened, but temporarily. Which is why we have a slightly bearish impact on gold today. We will explain the impact of US Government reopen in more detail in our next update.
GOLD – XAU/USD – Technical Outlook
- Taking a look at the 4-hour timeframe, the yellow metal gold is trading in an overbought zone.
- The RSI and Stochastics are steady above 90 which is good enough to trigger a correction.
- Gold has formed a bearish candlestick pattern called a shooting star. Shooting star is followed by a sharp bullish trend and it typically triggers a sell-off in the market.
- Gold has an immediate resistance near $1,303 along with support near $1,297.
Gold – XAU/USD – Trade Plan
Consider selling below $1,303 with a stop loss above $1,306 and take profit near $1,297 and $1,293.