Gold finally broke out of its Asian session consolidation phase and climbed to fresh multi-month tops, around $1206 region in the last hour.
January 29, GKFX – After yesterday’s directionless trading action, the precious metal regained positive traction on Tuesday and remained supported by reviving safe-haven demand amid fresh concerns over a further escalation in the US-China trade tensions.
In the latest development, the US Justice Department charged China’s Huawei Technologies with fraud and obstruction, which was now seen to complicate the upcoming high-level US-China trade talks and dented investors’ risk appetite.
This coupled with dovish Fed expectations continued weighing on the US Dollar and provided an additional boost to the dollar-denominated commodity, assisting traders to build on Friday’s bullish breakthrough the key $1300 psychological mark.
Despite a combination of supporting factors, the uptick lacked any strong follow-through as market participants still seemed reluctant to place any aggressive bets and preferred to wait on the sideline ahead of the latest FOMC monetary policy update.
This coupled with the US-China trade-related developments and Friday’s important release of the keenly watched US monthly jobs report (NFP) will play an important role in determining the next leg of a directional move for the non-yielding yellow metal.
Gold price technical forecast
Immediate resistance is pegged near June 2018 swing higher, around the $1209 area, above which the commodity is likely to extend the positive momentum towards testing the $1221 horizontal supply zone.
On the flip side, $1302-$1300 region now seems to protect the immediate downside, which if broken might prompt some additional profit-taking slide back towards $1293-92 horizontal support.
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