Gold prices edged up early on Thursday, as the dollar eased from 6-1/2 month highs hit earlier this week on a weaker-than-expected U.S. economic data. Moreover, should traders anticipate further near-term up-move for the commodity? This will be answered in the latest 31 May Gold Price Technical Analysis.
31 May, GKFX – Gold edged higher on Thursday and moved back to the top end of its weekly trading range, around the $1305-06 region.
Ongoing USD retracement underpins the dollar-denominated commodity
The precious metal extended this week’s rebound from $1293 area and gained some positive traction for the third consecutive session. The ongoing US Dollar retracement from 6-1/2 month tops was seen as one of the key factors underpinning demand for dollar-denominated commodities – like gold.
Adding to this, concerns about a full-blown US-China trade war, especially after the White House said to continue to pursue action on some $50 billion worth of Chinese goods, further supported the precious metal’s safe-haven appeal.
The positive factors, to some extent, were negated by easing political crisis in Italy – the Euro-zone’s third-largest economy and reviving investors’ appetite for riskier assets – like equities.
This coupled with some renewed pickup in the US Treasury bond yields might further collaborate towards keeping a lid on any further strong up-move for the non-yielding yellow metal.
Hence, it would be prudent to wait for a strong follow-through move beyond the very important 200-day SMA before anticipating any further near-term up-move for the commodity.
31 May Gold Price Technical Analysis
Immediate resistance remains near the $1307-08 region (200-DMA), above which the metal seems all set to test $1314-15 supply zone before eventually darting towards its next major hurdle near the $1321-23 region.
On the flip side, the $1300 handle now seems to protect the immediate downside, which if broken could drag the commodity back towards $1295 horizontal support en-route the $1290 region.
This article 31 May Gold Price Technical Analysis was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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