On Monday, the precious metal GOLD continues to trade higher over the trade war and the potential uncertainty that may come in future. A more significant movement in gold seems to be coming when the market “internalizes” a “no trade deal” scenario, leading to heightening tensions between the US and China affecting global growth and inflation forecasts. Let’s look at the technical outlook.

XAU/USD – Technical Analysis

Well, quite a few indicators are signaling bullish bias of traders. Let us discuss them one by one.

On the 4-hour chart, gold has violated a significant sideways range of 1,299 – 1,266. With this, the next range is likely to be 1,322 – 1,299.

The 50 and 200 periods’ exponential moving averages are left far behind at 1,266 and 1,285. We can imply two things.

• First, the market is strongly bullish as it’s holding over EMA’s.
• Second, the market is overbought, and sooner or later, we may have a bearish reversal in gold.

In both cases, the support stays at around 1,309 and 1,299. While resistance is likely to be at 1,322, the violation of 1,344 can lead to gold prices towards 1,341.

Gold – Trade Plan

The idea is to stay bullish over 1,312 with a stop loss below 1,309 and take profit at 1,317 and 1,322.

Good luck!