Gold prices fell during early morning session by more than 1% as equities rose on strong Chinese data, and the agreement between the US and Mexico. China's overall trade surplus in May was significantly more than expected despite fears of an ongoing Sino-US trade dispute, official data showed this morning. Meanwhile, the US and Mexico struck a migration deal late last week to avert a tariff war, after US President Donald Trump previously threatened to slap a 5% import tariffs on all Mexican goods this week if Mexico did not commit to tightening its borders. On the other hand, US Treasury Secretary Steven Mnuchin said over the weekend that the US will go forward with its plan to impose more tariffs if discussions with China do not go well.
After again new highs last Friday, Gold prices are falling sharply this morning amid a divergence that has occurred between the price and the momentum in the overbought zone. The price is currently breaking below the $1327.08 support level to the downside 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