During the early Asian session, the yellow metal GOLD prices surged as investors find safety from the trade war uncertainties. Gold prices mounted a fresh six-year high of around 1,556, as the latest tit-for-tat tariffs by the United States and China boosted demand for safe-haven assets.

Safe haven demand was triggered after China’s announcement regarding new tariffs on United States products. In retaliation, the United States President Donald Trump also pushed US organizations to move their production factories out of China. Meanwhile, the United States also increased the existing tariffs on $250 billion worth of Chinese goods to 30% from 25% as of October.

Additionally, a new series of tariffs on $300 billion in Chinese goods will be taxed at 15%, up from the current 10%.

On the other hand, the United States Federal Reserve Chairman Jerome Powell said at the yearly economic symposium in Jackson Hole, Wyoming that the United States economy is in a pleasant place and the Federal Reserve would perform to keep the present economic development on track.

The Federal Reserve had lowered interest rates last month for the very first time in over a decade, by twenty five basis points. Markets are awaiting the Central Bank to do the same in the coming month.

Daily Support and Resistance

S3 1443.5

S2 1480.22

S1 1503.55

Pivot Point 1516.94

R1 1540.27

R2 1553.66

R3 1590.38

For now, gold has formed a Doji pattern around 1,544 on the 4-hour timeframe. This kind of Doji pattern typically drives bearish reversals or correction and that’s exactly what we are seeing right now.

Gold can target 1,524 – the 50% retracement area, and 61.8% Fibo level of 1,516. We took our chances with a bullish position over 1,531 which marks the 38.2% but unfortunately, it knocked us out at stop loss.

Now let’s keep an eye on 1,524 and 1,516 in order to take bullish positions.

Good luck!