Spot Gold spikes to 3-mth high on risk aversion and signals of Fed rate cut

Slobodan Drvenica Windsor Brokers

Spot gold spiked to three-month high at $1344 on Wednesday, extending strong rally from last Thursday’s low at $1275 and approaching key short-term barrier at $1346 (2019 high, posted on 20 Feb).
Fresh advance is on track to fully retrace multi-month $1346/$1266 pullback and resume larger uptrend from 2018 low at $1160 (16 Aug).

The yellow metal’s price accelerated higher last week on signs of spreading trade war that prompted investors from riskier assets into safe-haven, with dovish comments from top Fed officials, signaling that the Fed may start cut interest rates on growing concerns about global growth slowdown.

Bulls show hesitation ahead of key $1346 barrier, as bulls started to run out of steam on strongly overbought studies.

Price adjustment may precede final attempt through $1346 pivot, with $1327 (broken Fibo 76.4% of $1346/$1266) and former high of 25 Mar ($1324) marking solid supports which should ideally contain dips and guard pivotal supports at $1316 (broken Fibo 61.8%) and $1315 (rising 5SMA).

Res: 1344; 1346; 1355; 1365
Sup: 1327; 1324; 1315; 1310

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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