Gold Price Analysis: Bull flag breakout could send XAU/USD to $1750 but the market is waiting on Trump
|- Gold has pushed nearly 1% higher as risk sentiment turns.
- Trump is yet to deliver his anticipated speech on China.
XAU/USD 4-hour chart
Gold has been pushing higher in the session after the risk theme turned on its head on Thursday night. Late in the US session, Donald Trump attacked social media companies pushing the Nasdaq lower and also said he would address issues surrounding China on Friday (today). Since China announced the new measures in Hong Kong the international community have condemned their decision making. On Friday morning White House Economic Advisor Kudlow said Trump will present ideas to hold China accountable. In addition to this, Secretary of State Pompeo also stated the US President will make a series of announcements on China.
This leads us nicely into looking at levels where gold might react to the announcement. Gold often reacts US-China related tensions as a move into safe-haven asset would be sensible choice if the trade war becomes even worse.
The 4-hour chart below shows that the bull flag pattern has now broken to the upside. There are two very important resistance zones to keep an eye on and a break of the wave high could mean the uptrend is resuming.
The 76.4% Fibonacci zone at USD 1748.20 per try once could be where the Elliott Wave 1-2 begins to the downside. If this level breaks then the high of USD 1765.30 per ounce is surely the next target. If the pair of them break the next meaningful resistance stands at USD 1800 per troy ounce.
If Trump backs off then support zones will be in focus and the wave low of USD 1693.92 is the first level of note. Beyond that, USD 1680 per troy ounce is next.
At the moment the weekly candle is fighting with where it opened up at the beginning of the week which is amazing considering how bearish it was looking at one stage. Any close higher would be an interesting sign.
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Additional levels
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