Gold prices are trading sideways as the market awaits fresh catalyst from the U.S. – China trade wars to determine upcoming trends in gold. However, in the absence of further escalation is weighing on gold prices and it could fall back below the 1480s.
Gold – XAU/USD – Fundamental Outlook
Gold prices trade sideways near $1,500 crucial trading level. Most of the bullish trend is produced by the escalation in the Sino-U.S. trade conflict and concerns of a global economic slowdown which triggered fresh interest for safe-haven assets.
On Thursday, the FOMC member and Chicago Fed President Charles Evans once again beat the dollar, prompting a small sell-off. Bears entered the market right after he indicated that he was welcoming to lowering rates to boost inflation and to counter risks to economic growth. Hence, the softer dollar triggered buying in gold.
GOLD – XAU/USD – Technical Outlook
To the upside, the first pit-stop likely comes in at the 1528/30s as prior support which could come in as the next major upside target where the price would be expected to hold initial tests. Then, bull swill looks to the 127.2% Fibo target which is located around 1,560.
Stochastics and RSI are holding in the overbought zone, and these may trigger a further bearish retracement in gold today.
Gold may drop further to complete 38.2% Fibonacci retracement at 1,490 before exhibiting a bullish reversal.
Key Trading Level: 1497.75
Gold – XAU/USD – Trade Tips
Consider staying bearish below 1497.75 to target 1,490 and 1,484.
All the best!