Gold eroded a major part of its early gains to ten-month tops and is currently placed at the lower end of its daily trading range, just above $1340 level.
February 20, GKFX – A combination of supporting factors assisted the precious metal to build on last week’s goodish bounce from the $1300 neighbourhood and post its highest daily close since April.
Investors’ anxiety on the back of the latest round of negotiations over the US-China trade spat, evident from a defensive stance in global stock markets was seen boosting the precious metal’s relative safe-haven status.
This coupled with a follow-through US Dollar weakness, triggered by a sharp fall in the US Treasury bond yields, provided an additional boost to the dollar-denominated commodity and further contributed to the up-move.
The momentum extended through the Asian session on Wednesday and lifted the commodity to the $1346-47 region – the highest since April 20, albeit near-term overbought conditions prompted some profit taking at higher levels.
Market participant now seemed inclined to take some profits off the table and prefer to wait for a fresh catalyst, expected to come in from today’s important release of the latest FOMC monetary policy meeting minutes.
The minutes from the January Fed meeting will be closely watched for fresh insights over the central bank’s rate-hike path for 2019 and eventually help determine the next leg of a directional move for the non-yielding yellow metal.
Gold price technical forecast
Immediate support is pegged near $1339 level, which if broken might prompt some long-unwinding trade and accelerate the corrective slide further towards the $1331-30 region. On the flip side, momentum beyond multi-month tops, $1346-47 area, could further get extended towards the $1254-55 supply zone.
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