Dramatic Dip in Gold Prices – Brace for a Buying Position
Arslan Butt • 1 min read
What’s up, traders.
There has been a dramatic dip in gold prices on Thursday during the US session. Gold prices fell over 230 pips, which is the most significant weekly slump in 2-1/2-years as confidence for a China-US trade agreement supported risk-on sentiment, fading the bullion’s demand.
Global stocks surged, and the greenback traded bullish after the US officials said that China and the United States have accepted to reverse back duties on each others’ products, but it’s only going to happen if the first phase of a trade settlement is confirmed between the nations.
With reduced demand for safe-haven assets, the US dollar also gained bullish momentum. Therefore, the negative correlation factor between the US dollar and gold also plays its role in driving the bearish trend in the precious metal gold.
GOLD prices fell dramatically over the stronger dollar and eased in the trade war sentiments between the US and China. It has violated the triple bottom level of 1,479. At the moment, it’s in the oversold zone, and sellers seem exhausted.
Therefore, we may see bullish correction above 1,467 until 1,474 level, and below this, gold may continue to drop. We should keep an eye on our gold hedge to close near 1,474 today.
Gold – XAU/USD – Technical Levels
Key Trading Level: 1489.31
We have already opened a forex trading signal to buy gold at 1469.105 with a stop loss below 1465.105 and take profit of around 1472.105.
Good luck, and stay tuned to FX Leaders for more signals.