Gold prices are taking bids above the 1425 mark during today’s early session as the on-going USD weakness and pessimistic trade/political plays, continue to please buyers. The FOMC-led USD decline continues to prevail after Monday’s Dallas Fed Manufacturing Index lagged behind the market consensus. Adding to the greenback weakness could be the US President Donald Trump’s criticism of the US Federal Reserve’s monetary policy system. At the geopolitical front, the US and Chinese leaders are to break the deadlocked trade negotiation during this week’s meeting of 20 global leaders in Japan. However, none of the sides are providing any positive statements to please trade optimists. Furthermore, Iran continues to stand tough against the US and turns down odds for the talk while the US President levied fresh sanctions.
Gold prices regained traction during yesterday’s session and surged to a fresh high of $1438.88 per ounce before quickly retreating back this morning. The price is currently trading just above the $1422.59 support level as the momentum begins to decline amid the overbought conditions and the divergence between the price and the momentum. This time we expect a drawback in price and we will be focusing on $1410.78 support level.
Support: 1401.62/ 1392.80
Resistance: 1410.78 / 1422.59