Following an initial dip to the $1483 area at the start of the week, the precious metal managed to regain some positive traction and built on the previous session's late bounce from over one-week lows. The fact that the US and China reached a partial trade deal on Friday provided a strong boost to investors' appetite for riskier assets, which eventually drove flows away from perceived safe-haven assets. The latest trade optimism faded rather quickly and was evident from a weaker tone around equity markets. A slight deterioration in the global risk sentiment turned out to be one of the key factors that underpinned the precious metal. The uptick, however, lacked any strong bullish conviction amid a goodish pickup in the US Dollar demand, which tends to weigh on dollar-denominated commodities.
Gold prices edged higher during yesterday’s session as expected to challenge the $1494.87 resistance level following a dip towards the $1483 area at the start of the week. The price is currently trading just above the $1491 level with the momentum settling in the neutral area as we can see on the RSI chart. We will be focusing on the upside as we are expecting a sharp move and we will be watching closely the upper band, especially the $1506.02 resistance level.
Support: 1486.98/ 1474.99
Resistance: 1594.87/ 1506.02