The following hours will be utterly crucial for markets. The supreme mystery of the day is whether the US and China can strike a trade agreement by night Friday in Washington, or will increased tariffs kick in by 12:01 AM?
Given the imminent deadline, hope for a trade agreement between the US and China seems to be waning which is why we consistently see a strong bullish trend in gold and Japanese yen. Today on Thursday, the markets are likely to be super-sensitive to any development about US-China trade negotiations.
Gold’s Technical Outlook
XAU/USD reversed off from our first resistance at 1288.77 (horizontal swing high resistance, 50% Fibonacci retracement ) where a significant drop might occur below this level.
Bulls would want still to close over 1298 to oppose the bearish bias although a test of 1302.80 and a close above 1303.20 would be favored to buy into.
On the lower side, under 1,278 and then 1,275, gold can run down to test the 1,266 lows again ahead of where 200-DMA meets that 50% Fibo down at 1,254.
Support and Resistance
Key Trading Level: 1282.99
The idea is to stay bullish above 1,280 and bearish below 1,291 until this current range is violated. All the best!