Global growth concerns were once again sending markets into a risk-off mode following revived risks over tensions between China and the US despite the recently agreed cease-fire that has now come under jeopardy. The arrest of the chief financial officer of the Chinese telecoms company, Huawei Technologies, by the Canadian authorities, who now faces extradition to the US over possible violations of sanctions against Iran, has encouraged a response from Beijing requesting that both Canada and the US to "rectify wrongdoing". Investors are anticipating the worst amid fears that global economic growth and geopolitical relations are at risk as the trade tariff war between the two giant economies could take a wrong turn.
Gold prices are back on top as they consolidate in a pennant formation in order to continue the rally. The price has received a good support from the $1237.8 level and is currently testing the upper band of the pattern. Once it picks up momentum which is relatively declining at the moment, we expect a continuation of the upward move, that is why we will be focusing on the $1247.5 resistance level.
Support: 1237.79 / 1234
Resistance: 1241.76 / 1247.5