Gold outlook: Bullish bias above daily cloud, all eyes on Trump's meetings with political leaders

Gold

Gold price edged higher in early Monday, as uncertainty grows ahead of today’s meeting between President Trump and leaders of Ukraine and some European countries.

The US President sent a strong signal that the US wants to end war in Ukraine, following Friday’s Trump-Putin summit in Alaska, which many analysts described as the most significant political event in 21st century.

Although Trump’s rhetoric is still rough in some cases and includes threats to both sides, it looks that the story may accelerate towards the peace agreement as Trump sees restoring of ties with Russia and new business deals as better solution than to continue to confront them.

The Europe and Ukraine’s space to maneuver has narrowed further, mainly due to their high dependence of US help, which could be reduced or stopped in case they reject Trump’s suggestions.

However, we may see a clearer picture probably by Tuesday morning, when results of top-level meeting (due later today) come out.

Gold price would come under pressure if the outcome of today’s meeting signals a peace deal on horizon, while prevailing hawkish tones would likely boost safe-haven demand and lift metal’s price.

Technical picture on daily chart remains bullishly aligned as near-term price action continues to float above the top of daily Ichimoku cloud ($3337), also supported by ascending trendline lower boundary ($3327).

Momentum indicator is in positive territory and adds to bullish bias, although near term action needs to see lift above $3365/74 zone (daily Tenkan-sen / Friday’s peak) to strengthen bulls for attack at $3391 (upper triangle boundary) and unmask upper breakpoint at $3400 zone (psychological / Aug 8 high).

Conversely, penetration and closing within daily cloud (below triangle support line) would weaken near term structure and bring in focus key supports at $3300 (psychological) and $3286 (daily cloud top).

Interesting situation could be also seen on monthly chart, where three consecutive long-legged monthly Dojis and four strong upside rejections generate signals of high uncertainty, but also warn that larger bulls might be running out of steam.

Markets will be also focusing on Jackson Hole symposium which starts later this week and look for more signals about Fed’s interest rate path.

Res: 3353; 3366; 3375; 3391.
Sup: 3337; 3327; 3321; 3307.

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