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Daily FX Brief, May 24– Market Wrap – How to Trade Gold Today?

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The U.S. stocks trimmed some profits made in the previous session. The Dow Jones Industrial Average fell 100 points (-0.4%) to 25776, the S&P 500 slipped 8 points (-0.3%) to 2856, and the Nasdaq Composite was under 34 points (-0.5%) to 7750.[

In its fresh monetary-policy meeting minutes, the U.S. Federal Reserve declared that central bank officials consider a “patient approach” concerning the target range for the federal funds rate would be “appropriate for some time” and recognized that risks described earlier in the year (global economic outlook, Brexit, trade negotiations) have “moderated”.

European stocks traded mixed, with the Stoxx Europe 600 Index binding down 0.1%. Germany’s DAX added 0.2%, the U.K.’s FTSE 100 was up less than 0.1%, while France’s CAC eased 0.1%.

The Greenback was little changed as the news from the Federal Reserve’s fresh monetary-policy meeting minutes was as forecasted. The dollar index finished at 98.07, compared with 98.06 in the previous session.

Gold Surge Over 1,280 – Quick Analysis

On Friday, the gold prices are now posting double-digit gains and are near daily highs in late-morning action. The demand for safe-haven featured in gold has surged dramatically as the U.S. and world stock markets see selling pressure due to renewed U.S.-China trade worries and by some concerns about the upcoming European elections.

Moreover, the U.S.-Iran pressures are also in the backdrop. A significant drop in crude oil prices late this week (down around $5.00 a barrel since Tuesday) is also now working in favour of the gold market bulls, due to the keener uncertainty of the steep drop. June gold was last up $10.10 an ounce at $1,284.30.

At the moment, gold is surrounded by a pair of significant retracement zones. On the lower side, the support area is $1272.70 to $1253.00. On the upside, the resistance area is $1299.80 to $1325.90. This region is controlling the longer-term direction of gold.

 

Whereas, the short-term range is $1304.20 to $1269.00. Its retracement region is $1286.60 to $1290.70. The lower or 50% level at $1286.60 provided resistance earlier on Thursday at $1287.10.

Support and Resistance

R3: 1310.13
R2: 1295.66
R1: 1289.49
Key Trading Level: 1281.19
S1: 1275.02
S2: 1266.72
S3: 1252.25

Gold – XAU/USD – Trade Tips

A sustained movement over $1286.60 will symbolise the presence of bulls. That could execute a rally into the short-term Fibonacci level at $1290.70 and the December 31, 2018, main close at $1294.20. So consider staying bullish over 1,280 and bearish below the same to target quick 40 pips on each side. All the best!

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