Gold trading at 9 months high

• Gold trades at its highest level in more than 8 months on the back of a potential escalation in US-China trade tensions. This comes as the US charged telecommunication equipment giant, Huawei, over bank and wire fraud.
• A weaker US Dollar also helped push spot gold through a key psychological level. The USD traded near a two-week low as the FED is expected to press pause on its interest rate hike cycle.
• The precious metal has risen close to 13% since its 19-month low hit in August 2018.
• Technically, gold is trading in a crucial resistance area between 1,300-1,3010. A confirmed break above 1,306 may bolster topside risks.
• A rally through the top of an upsloping channel highlighted strong bullish momentum with prices just shy of 1,300. Sellers pushed prices back below the 61.8% fib level of the April-August (2018) selloff, though the correction soon found support at the channel top.
• For now, gold must face resistance from the 76.4% fib level of the aforementioned decline if it continues to rally higher. A key resistance area between 1,320 and 1,326 may forestall gains if the fibo gives way.
• Daily trending setups suggest a greater bullish scenario. The 50/21 EMA’s are biased up, reinforcing near-term positivity. However, their separation also suggests a potential overbought situation, possibly causing a near-term correction. Nevertheless, the 50/21 EMA’s should offer support to any retracements and currently reside at 1,268.34 and 1,286.60 respectively.
• Daily momentum setups hold their positive stance. The 14-Day RSI continues to track higher, approaching the 70 level. The MACD lines are touching and a positive cross may confirm further upside.
• Initial upside targets are the 76.4% fibo and the 1,320-1,326 resistance region. If these levels gave way, a deeper topside target would be the 23.6% fib extension level taken on from the August low.

Gold Monthly - The crucial $1,300 level.

Gold Daily

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 28/01/2019

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