Gold’s Safe Haven Fades – What’s Going On? - Forex News by FX Leaders

Gold’s Safe Haven Fades – What’s Going On?

Posted Monday, June 10, 2019 by
Arslan Butt • 1 min read

Earlier during the Asian open, gold prices retreated from a 14-month peak after an agreement between the United States and Mexico to prevent a tariff war pinched safe-haven appeal for the yellow metal.

To recall, the United States and Mexico locked a deal on Friday to avert tariff war, with Mexico allowing to quickly develop a controversial shelter program and use security forces to stop illegal migrants.

Secondly, the global stock markets also bounced after the United States dropped its threat to impose tariffs on Mexico. The weaker US labor market figures also hiked hopes for the US interest rate cuts. Since stocks and gold share a negative correlation, we saw massive sell-off in gold earlier today.

GOLD – XAU/USD- Technical Outlook

On the technical front, gold is facing a strong resistance near 1,345, especially after it has closed a tweezers top pattern, confirming neutral to bearish stance of the market.

Secondly, the pair has also formed a three black cross candlestick pattern, which is likely to add further selling trend in gold.

The RSI and Stochastics also hold below 50, suggesting a bearish bias.

Gold – Trade Idea

Consider staying bearish below 1,330 with a stop loss over 1,335 and take profit around 1,317. On the way to 1,317, gold may have to bypass one of the significant resistance levels at 1,327.

Good luck!

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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