A day before, the yellow metal GOLD continued to see substantial gains as Asian markets opened on Wednesday with the metal gaining more than 1%, trading at around $1,432 resistance. The risk on sentiment turned to risk-off as concerns of a swift end to the US-China trade dispute weakened and fresh trade tariffs in Europe deepened concerns over moderate economic growth.
On Tuesday, the European Union stated it was open to discussions with the United States in a conflict over aircraft subsidies while planning reprisal following the hefty tariffs from the US.
US bond yields extended their earlier gains as traders boosted the odds of the Federal Reserve would lower borrowing costs (interest rates) by 50 basis points at the end of July following comments from Bank of England’s Governor Mark Carney.
Gold – XAU/USD – Technical Outlook
On the 4-hour timeframe, gold has tested $1,438 level for the second time two weeks, making this level double top. Now it’s going to work as a stronger hurdle for gold bulls.
Stochastics and RSI are holding above 80, in the oversold zone and suggesting odds of a bearish retracement. Continuation of correction can lead to gold prices towards $1,419 and $1,414.
On the flip side, a bullish breakout of second top-level $1,438 can lead gold towards $1,451 and $1,465.
Key Trading Level: 1409.45
Gold – XAU/USD – Trade Idea
I’m going gonna wait for the market to test $1,438 on the upper side or $1,414 on the lower side to take either a buy or a sell position. For now, it’s in between a sideways range and may not help us secure profits.