Gold Slips Over Bearish Breakout – is it Going After $1,267?
Arslan Butt • 1 min read
At the start of this week, gold prices were trading flat in Asia due to the rise in the US dollar. Actually, the bearish rally was triggered on Friday, when gold fell to over two weeks’ low. The bearish spike was caused by better than expected US consumer sentiment which triggered a surge in the US dollar. The consumer sentiment was at a 15-year high lately.
Gold prices also eased over after China state-run media showed excitement about the progress of trade agreement with Washington and also supported the dollar.
Let us recall, the market sentiment turned bullish for gold when US President Donald Trump surprisingly announced an increase in tariffs on 200$ billion worth of Chinese goods, after blaming China for slowing down the progress in discussions.
Last week, China countered the US by announcing duty hikes on American imports.
XAU/USD – Technical Analysis
- On the technical side, gold consolidates around 1,275 support, extended by a horizontal trendline.
- The 200 periods moving average stays at 1,285, suggesting a bearish bias of traders.
- Leading indicators, RSI and Stochastic, hold under the oversold zone, signaling high odds of a bullish retracement.
- The bearish breakout of 1,275 can trigger further sell-off until 1,266 and 1,261. While resistance stays around 1,282 and 1,296 today.
Key Trading Level: 1280.52
The idea is to trade the choppy market by being bearish under 1,284 and bullish above 1,275 with 40 pips take profit and 30 pips stop loss on both sides.