During the European session, the yellow metal gold mounted to a six-year high over a weaker dollar. Well, there’s not a sole reason behind this massive buying, and in this update, we are going to take a quick review of them along with seeing the technical aspects of the market.
Firstly, the prospects of dovish monetary policy by the U.S. Federal Reserve and boiling U.S.-Iran anxieties continued to stoke bullish viewpoint in the market.
Uncertainties and potential for the U.S. China trade deal are also putting gold on fire, especially after a senior U.S. official said that President Donald Trump is “comfortable with any outcome” when he talks with China President Xi Jinping at the G20 later this week. Investor sentiment was depressed after his remarks, as it is doubtful that a trade settlement will be settled later this weekend.
Meantime, strains with Iran extended following the White House targeted sanctions on Iran’s Supreme Leader Ayatollah Ali Khamenei, including other top executives and cut off passage to financial resources.
Speaking of technical indicators, these haven’t changed much so far. Gold prices have tested the $1,438 resistance level before triggering retracement. On the 4H chart, gold is likely to drop until $1,417 in order to complete 38.2% retracement.
Continuation of bearish retracement and the violation of $1,417 can lead gold prices towards $1,4011, the 50% Fibbo level.
Key Trading Level: 1416.39
Gold may keep choppy trend for now, therefore consider taking selling positions below $1,439 and buying positions above $1,416. All the best!