Gold Bullish Signal – Chinese PMI Hikes Fuels Safe Haven Demand
On Tuesday, the yellow metal gold prices surged lackluster Chinese factory activity data sent Asian shares lower, rekindling concerns...
On Tuesday, the yellow metal gold prices surged as lackluster Chinese factory activity data sent Asian shares lower, rekindling concerns about the health of the global economy. The risk-on sentiment reversed across Asian and European markets after disappointing manufacturing PMI figures from China, triggering a sell-off in currencies, emerging markets and equity markets.
Reading on the official Purchasing Managers’ Index (PMI) for manufacturing surprisingly plunged to 50.1 in April from March’s version of 50.5. Consequently, it triggered concerns about the economic state of China and pressed Asian equities lower, driving more investment for safe haven assets such as gold and Japanese Yen.
Besides that, traders now await the US Federal Reserve’s two-day policy meeting starting later in the day for signs on the interest rate outlook.
On the technical front, GOLD is trading slightly bullish at 1,282 after testing more-than one week high on Friday. So the bearish bias and trend in the US dollar is keeping the gold bullish. On the daily timeframe, gold is still holding below 50 periods EMA which demonstrates the bearish bias of traders. But in the short run, we can capture a bounce off.
Support Resistance
1276.67 1284.57
1273.46 1289.27
1265.56 1297.17
Key Trading Level: 1281.37
Gold Trading Signal
Gold is likely to continue its bullish momentum above1,281 to hit our target level of 1,286 today.
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