Gold near 10-week high amid political challenges, doubts over Fed’s rate hike
|- Fears of the global slowdown, Fed rate cut negatively affect risk sentiment.
- Fed Chair’s speech, trade news will be observed for fresh impulse.
With the rising speculations of global economic slowdown, coupled with Fed’s rate cut, Gold prices are on the bids near $1327 during the initial Asian session on Tuesday.
The yellow metal trades close to the March high as sluggish data-points from the US and comments from one of the Fed policymakers raised prospectus of the rate cut by the US Federal Reserve.
Another important aspect of the present price rally is the US-led challenges to global trade mechanism.
Aforementioned catalysts together drag the global risk barometer the 10-year US treasury yield down to near September 2017 lows.
Latest trade headlines suggest nearly $117 billion of losses due to the Trump administration’s Mexican tariffs while China is actively speaking against the US trade protectionism in media.
Looking forward, comments from the Fed Chair Jerome Powell will be closely observed to reconfirm bearish bias over the Fed’s future moves while news reports concerning the global trade can keep entertaining the bullion traders.
Technical Analysis
FXStreet Analyst Ross J Burland says that bears look for pullback to $1297/98 while $1346.75 becomes important upside resistance to watch:
$1297 comes in as a compelling downside target being the 50% Fibo retracements of the late April and early May double-bottom swing lows to recent spike high. On a continuation to the upside, on bullish weekly stochastics, 1346.75 comes in as the 2019 highs.
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