The precious metal gained more than $30 last week boosted by stronger demand for safer assets, China's extended gold-buying amid the ongoing trade conflict with the US, and a broadly weaker greenback. At the start of the new week, however, the XAU/USD pair staged a deep correction and lost more than 1% before rebounding modestly in the last hour of yesterday's session. The improved sentiment following the news of the US reaching a deal with Mexico and canceling tariffs allowed global equity indexes and the 10-year US Treasury bond yield gain traction, making it difficult for traditional safe-havens to find demand. Additionally, during an interview with CNBC, US President Donald Trump said that he believed that the trade deal with China will work out.
After again new highs last Friday, Gold prices fell sharply during Monday’s session amid a divergence that has occurred between the price and the momentum in the overbought zone. The price is currently trading just above the 1327.08 support level with a falling momentum. We will be focusing on the $1321.47 support level as it also coincides with the 38.2% Fib level as we can see on the chart.
Support: 1321.47 / 1316.78
Resistance: 1327.08 / 1331.48