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.
© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 28/01/2019
The content of this text is deemed reliable, but the accuracy or completeness of the of the information therein is not guaranteed and AGORA-direct Limited shall not be liable for a delay if this information is not kept up to date. Although Agora-direct Limited believes that all information in this text is accurate, Agora direct Ltd. shall not be liable if this is not so. The information must not be suitable for everyone and should not be construed as an offer, recommendation, advice, call for action, or advertisement intended or designed.