The precious metal gold prices hit a more than six-year high around $1,535 as unrest in Hong Kong and a retreat in the Argentine peso prompted investors already alarmed by the U.S.-China trade war into havens. Therefore, they started investing in bullion at the expense of riskier assets such as stocks.
Stock markets slipped for a third day as traders were spooked by concerns of a drawn-out global trade war, the Hong Kong rallies and a collision in the peso. A day before, pro-democracy protesters on Monday succeeded to shut down the city’s airport, the world’s busiest air cargo hub in Hongkong, triggering massive level of uncertainty in the market.
Besides that, Argentina’s peso dropped dramatically on Monday, dissipating roughly 15% of its value against the dollar after breaking to an all-time low. That was another reason why gold took a sharp bullish flight.
Gold – XAU/USD – Technical Analysis
On the fundamental side, gold has completed 78.6% Fibonacci extension at $1,527 after placing a high around $1,535.
Taking a look at 3 hourly timeframes, the RSI and Stochastics are stuck in the overbought zone, signalling sellers are looming around the corner.
Although gold’s trend is still bullish, but traders need slight correction before taking another buying position in gold.
On the lower side, gold can drop towards 1,518 and 1,512 before bouncing off. Whereas, resistance stays at 1,527 and 1,535 today.
Key Trading Level: 1499.93
Gold – XAU/USD – Trading Tips
Consider staying bullish above 1,512 and bearish below 1,527 today as the market is now likely to trade within this range. Choppy trading is appreciated during the New York session. All the best!