The precious metal hit two-week lows on Friday as the US Dollar surged following the release of the data that showed US consumer sentiment was at 15-year high. Reports that China’s state-run media expressed impatience over the progress of trade negotiations with Washington also supported the Dollar. Unlike many assets, Gold is in a unique position in the US-China trade war. A positive resolution on that means the yellow metal could benefit from more jewelry and other bullion-related consumption in China. A negative outcome could bolster Gold's standing as a safe-haven hedge against further weakening in Chinese growth.
Gold prices continued its plunge during Friday's session reaching the 1275 area and breaking below the trend line presented on the chart as it fails to provide the right support. The price is currently trading nearly flat this morning as Friday's lows are being retested with the support of a negative momentum. However, the little divergence between the price and the RSI in the oversold zone could send the prices up as we will be focusing on the 1280.11 resistance level.
Support: 1274.72 / 1271.85
Resistance: 1277.18 / 1280.11