The troy ounce of the precious metal gained more than $40 in the second half of the session during yesterday’s session following US President Donald Trump's tweets regarding the trade conflict with China. Trump tweeted that “trade talks are continuing, and during the talks the US will start, on September 1st, putting a small additional tariff of 10% on the remaining 300 billion dollars of goods and products coming from China into our country”. The market reaction to Trump's announcement triggered a flight-to-safety, ramping up the demand for traditional safe-havens. Additionally, major equity indexes in the US turned red on the headlines, confirming the sharp shift in the risk sentiment. Now the focus will remain on the trade war's evolution and investors will also be watching closely the employment reports that are due later during the day.
As expected, Gold prices edged lower at first towards the $1400 support zone before firing up by an impressive 48$ until this morning as the bulls stepped in hard. The price is currently trading just below the yearly highs above the $1441.79 resistance level with a strong momentum still far from the overbought zone. We expect a small breather to take place after the overextended move and then we will focus on the potential break above the upper band of the flag represented on the chart
Support: 1410.78 / 1401.62
Resistance: 1435.81 / 1441.79