Gold price rose sharply in the Asian session. The XAUUSD pair reached a high of 1554.23 as investors continued the rush to safe havens.
26 August 2019, GKFX – The US-China trade tensions escalated further following the US President Donald Trump's announcement on late Friday to raise existing tariffs on $250 billion worth of Chinese goods to 30% from 25% as of October. This comes on the back of China's retaliatory tariffs on $75 billion US imports and continued benefitting the precious metal's safe-haven status.
The commodity added to Friday's strong up-move and opened with a bullish gap at the start of a new trading week. The positive momentum lifted gold price to an intraday high level of $1554 - the highest since April 2013 - albeit started losing steam after China's Vice Premier Liu He said China is willing to resolve trade issues with the US via claim negotiations.
This was followed by Trump's positive trade-related comments that China called the US negotiators last night and said that they want to come back to the negotiating table. The positive developments led to a sudden turnaround in the global risk sentiment and prompted some long-unwinding trade/profit-taking move around the commodity.
Meanwhile, the downside seemed limited, at least for the time being, as investors now look forward to a fresh batch of US economic data this week - including the release of US durable goods orders data later this Monday - for more insights over the impact of intensifying US-China trade war. The incoming US macro data might influence the Fed's near-term policy outlook and help investors determine the next leg of a directional move for the non-yielding yellow metal.
Gold price technical forecast
The price of gold rose sharply in the Asian session. The XAUUSD pair reached a high of 1554.23 as investors continued the rush to safe havens. This followed a difficult few days in which the risk of a recession has increased. On the hourly chart, as a result of the gap, the price is trading above the upper line of the Bollinger Bands while the RSI is firmly above the overbought level of 70. At this point, there is a likelihood that the pair will continue moving higher, with the next point to watch being 1,600.
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