Gold’s Steady as Risk-Off Sentiment Begins to Fade – Trade Plan
On Monday gold prices are stable in a narrow trading range of 1,290 – 1,280, as the trade discussions between the United States and China hit a wall. The US lifted tariffs from 10% to 25% and China in return vowed to retaliate. This is decreasing expectations of a trade deal in the near future and raising demand for safe-haven assets.
Last week, gold price increased in India due to increased retail purchase for essential festivals and wedding season. Let me remind you that India is one of the biggest consumers of gold and news about physical demand triggers a bullish trend in gold prices.
Secondly, the trade war has weighed on the Chinese Yuan, making it weaker among peers, and ultimately making gold expensive for the world’s largest gold consumer.
Gold Daily Chart
Recalling our weekly forecast on gold, it’s likely to trade in the same range of 1,290 – 1,280. But the breakout will determine further trends. If gold violates 1,290 on the upper side and manages to close a daily candle outside this resistance, we may see a bullish rally until 1,309. On the flip side, the bearish breakout of 1,280 could extend selling until 1,271 and 1,267.
Good luck!
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