Gold jumps to $3,490 as US court ruling invalidates Trump tariff

Rate Cut Expectations Boost Gold to $3490.
Dollar Index Retests 97.50.
US Court Invalidates Trump Tariff.
Global Central Banks Step Up Gold Purchases.
Markets Await Nonfarm Payrolls.

Sunil Kumar Dixit SK Charting

Fundamental drivers

With the beginning of 1st trading day of September, Gold witnessed strong buying rush as rising expectations of rate cut by Fed pushed Dollar index to 97.50 adding tailwinds to Gold rallying all the way to $3490, only $10 short of record $3500.

A US court ruling has invalidated trade tariffs imposed by the US president Donald Trump which increases political uncertainty as Trump's egoistic ambitions to control the Fed's independence creates deadlock.

The world watches SCO where India, Russia, China meet to discuss cooperation signalling a paradigm shift for dollar hegemony.

Macro risks and safe haven buying are boosting Gold rush for safety against global economic uncertainties.

Technical drivers

4 hourly 14 period RSI reading 80 reaches overbought territory and indicates presence of bulls and any pullback towards support zone is attracting buyers for further rally.

Price action shows sideways trades with consolidation below $3490 high and upcoming sessions may witness a retracement to local demand area $3454-$3447 where buying is likely to resume for another leg up.

If the metal breaks below $3454-$3447, look for further retracement towards $3436-$3428 below which next support sits at $3415-$3405 which aligns with horizontal breakout zone and turning point.

On the higher side, consolidated break above $3490 will signal retest of $3500 record high and a break above the psychological zone $3500 opens the way for bullish extension to triangular breakout targets $3545 followed by $3568.

Author

Sunil Kumar Dixit

SK Charting

Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.

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