Gold Set for a U-turn – Let’s Capture Correction
Arslan Butt • 1 min read
On Thursday, the precious metal gold prices surged to $1,515 level again after topping the $1,500 mark during the US session yesterday. The safe-haven appeal was triggered over an escalated trade war between the US and China. Moreover, central banks around the world are expected to slash interest rates amidst fears of a global recession.
A day before, the Chicago Fed President Charles Evans signaled that he was open to lowering rates to support inflation and to counter risks to economic growth. He once again hit the dollar, causing a slight sell-off. Ultimately investors entered buyings in gold. Morevoer, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, announced its holdings increased 1.02% to 845.42 tonnes on Wednesday from 836.92 tonnes on Tuesday. This indicates a bullish bias among institutional investors as well.
GOLD – Technical Outlook
For now, the yellow metal is in the overbought zone, and do need to retrace back before continuing its bullish bias.
Stochastics and RSI are holding in the overbought zone, and these may trigger a further bearish retracement in gold today.
The Fibonacci indicator is supporting gold around 1,498 and 1,490 (23.6% & 38.2%) levels.
XAU/USD – Technical Levels
Key Trading Level: 1497.75
XAU/USD – Trade Plan
I will be looking to stay bearish below 1,500 level to target 1,492/90 level today.