Gold has been in demand and extended its Friday's rally, moving to a high of $1,472.92 until now following heightened tensions in the global stage between the US and China taking the spotlight away from the Federal Reserve for the time being. However, markets are increasing their bets that the Federal Reserve will cut interest rates again at the next meeting which has been weighing on the Dollar and has enabled the yellow metal to break into fresh bullish territories. Overnight, China’s yuan dropped to the lowest level in more than a decade after the People's Bank of China fixed USD/CNY above 6.90 after President Donald Trump announced additional tariffs on Chinese goods. China pledged retaliation and there are presumptions that the talk of China banning or taxing US imports of agricultural products. On the other hand, markets are looking for a deterioration in US labour market as well as today's services data for confirmation that the Fed will start signaling that they are willing to do more than insurance cuts.
Gold prices surged during yesterday’s session and continue to do so this morning adding a whopping 2.5% to its value reaching a high of $1472.92 per ounce so far. The price is currently trading just below the $1474.99 resistance level, a territory that has not been breached since 2013 after breaking above the upper band presented on the chart as expected. We will still be focusing on the upside now that we entered the overbought zone, and the next level to watch will be the $1482.82 resistance level.
Support: 1456.93 / 1441.79
Resistance: 1474.99 / 1482.82