Gold prices are surging dramatically on Friday, adding around 0.54% from1,496 to 1,506 amid trade uncertainties and ahead of U.S. Fed chair’s speech for clues on future rate cuts.
Federal Reserve Chairman Jerome Powell’s – Jackson Hole
Traders are closely watching Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole seminar to have further clues on monetary policy after minutes of the U.S. central bank’s July meeting eased hopes of competitive rate cuts.
More moderate interest rates reduce the opportunity cost of owning non-yielding bullion and press on the dollar. Nevertheless, it was denting bullion’s appeal, the dollar index was up 0.2% on Friday.
Gold’s Biggest Consumer China Lifts Restrictions
China has partly lifted limitations on imports of gold, bullion industry experts said on Thursday, releasing barriers that had held an estimated 300-500 tonnes of the metal worth $15-25 billion at current prices from accessing the country since May.
Gold Hit 38.2% Fibo Level – What’s Next?
The recent safe-haven appeal has fuel gold prices to 1,506, the 38.2% Fibo level and investors are looking for 50% and 61.8% Fibo levels at 1,510 and 1,514 respectively.
Support and Resistance
Key Trading Level: 1498.3
Gold has recently crossed over 50 DEMA which was extending resistance at 1,503. This level may work as support now. The bullish engulfing candle is suggesting strong bullish bias among traders, however, the closing of candle below 1,507 may drive bearish retracement during the U.S. session.