Thursday, July 18, 2019

GOLD - 18 July 2019

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Fundamental Highlights

In a very volatile session, gold prices finally broke out from the consolidation range as the Dollar eased slightly and U.S. yields slipped. As central banks get more aggressive with policies that devalue currencies and are about to cause a “paradigm shift” in investing and with President Trump saying Tuesday that there’s still a long way to go to reach a deal with China, threatening to slap tariffs on another $325 billion of Chinese goods, gold is becoming the strongest currency attracting more and more demand as investors look towards alternative assets. Moreover, Ray Dalio, founder of the world’s largest hedge fund, wrote in a LinkedIn post that investors have been pushed into stocks and as a result, too many people are holding these types of securities and likely to face diminishing returns. Gold will outperform according to Dalio.

Technical Analysis

Gold breaks back above the 20-Day moving yesterday, dominated by bulls lifting the market higher throughout the day, and closing back above the 1418 resistance now acting as support. Yesterday's close at 1428 marks the highest recorded “closing price” since August 2016 as the market confirms its breakout throughout the previous session with the medium and long-term trends now clearly bullish. Upside momentum might accelerate should the market be able to break out to new highs for the month at 1441 and close above the second key resistance level at 1435. A slight correction downwards is expected in the short-term back to the 20-period moving average as the RSI shows decelerating momentum on the hourly chart.

Support: 1418 / 1401
Resistance: 1427 / 1435

Chart (H1)
GOLD