Gold prices continued to rise this morning after surging during Friday's session amid worries over Mexico and escalating trade tension between China and the US. The Trump administration announced on Thursday it will impose a 5% tariff on all imported goods from Mexico beginning June 10 and “gradually increase” that tax to 25% until the flow of undocumented immigrants across the border stops. The news sent the yellow metal higher. On Sunday, China implemented the previously announced tariff hikes and said it will take action against “unreliable” foreign companies, with a list of violators pending.
Gold surged during Friday's session adding around 1.7% in value with strong momentum the whole session. Prices kept breaking all resistance level to finally settle above the $1300 level. The price is currently trading just below the $1310 level with an overextended move. We expect a pullback to retreat from the extreme overbought conditions and we will be watching near support levels.
Support: 1291.35 / 1288.35
Resistance: 1295.36 / 1298.49