On Wednesday, prices of the gold surged dramatically during the early European hours amid escalation in trade tension between the U.S. and China. Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, were up 0.3% at $1,335.75 per ounce.
You must be reading this commentary every day, and it keeps on revolving around trade war, the U.S. and China but’s literally what impacting the price action in the market. Yesterday on Tuesday, gold sold off right to the support level we wrote about yesterday. The levels are bright and remain $1,320-$1,350. This pattern is known as vast, sweeping consolidation, which is typical for a market getting ready to make a big move.
Gold -Technical Outlook
It’s pretty bullish much especially after testing the 38.2% Fibonacci retracement level of 1,319 on Monday.
The 20, 25 and 50 periods EMA also supported the gold prices around 1,319 which makes this level pretty solid.
On the upper side, we may see gold prices testing the double top level of 1,344. It’s going to be exciting watching if the prices hold below the double top or violate it.
A bullish breakout could extend the buying trend until 1,356 and 1,364 while support levels continue to be 1,333 and 1,319. All the best!