Gold bulls testing the commitments of the bears at key resistance


  • Gold has busted through yesterday's resistance but yet to break 1529/30.
  • Futures on Thursday for  December delivery rose $3.40, or 0.2%, to settle at $1,531.20.

Gold prices have been grinding to the upside and has exceeded yesterday's sessions highs, breaking through $1,524 and scoring a high of $1,527 in recent trade. Gold prices are up 0.39% on the day having travelled up from a low of $1,508. 

The bulls are fully in control as investors steer clear of the risky asset classes. The US 10-yers yields have fallen to the lowest levels since August 2016 and gold is loving it. The inversion of the 2/10-year curve that took place yesterday sent panic into the markets sending stocks lower and driving Trump to the twitter platform that he is using more frequently of late, obviously concerned for how the stock markets are performing. 

Futures on Thursday for  December delivery rose $3.40, or 0.2%, to settle at $1,531.20 an ounce and this was the highest most-active contract finish since April 11, 2013.  In other precious metals, spot silver is up 0.33%, travelling between $17.10 and $17.38. The September silver, however, did not perform so well and held onto some of its earlier loss, to end 6.6 cents, or 0.4% lower, at $17.214 an ounce. The gold & silver ratio travelled higher by 0.29% between a range of 87.61 and 88.36 as gold takes up the most of investors idle capital in doom and gloom markets. 

Gold can only keep on a northerly trajectory

In this poor global growth outlook, where, at best, for the year 2020, economists are assuming easing central bank policies will only add an additional 0.2%, gold can only keep on a northerly trajectory.  However, when you factor in the possibility of trade wars getting worse, downgrades to such growth forecasts will be factored in. China, Germany and the US are slowing and UK's Brexit saga is an additional concern. US consumer spending, jobs and wages are reasonable and are helping to underpin consumption, so the Dollar is likely to outperform in the FX space, which could make gold's prospects for the upside somewhat shorter despite expectations of an easing bias at the Federal Reserve. 

Gold levels

Gold has yet to break the 1528/30s which were a prior support area where the price has been expected to hold these initial tests. However, on a full-on break higher, bulls will look to the 127.2% Fibo target which is located around 1,560, guarding the Oct 2012 highs at 1795.

XAU/USD

Overview
Today last price 1522.6
Today Daily Change 6.30
Today Daily Change % 0.42
Today daily open 1516.3
 
Trends
Daily SMA20 1454.8
Daily SMA50 1413.34
Daily SMA100 1350.75
Daily SMA200 1314.11
Levels
Previous Daily High 1524.06
Previous Daily Low 1494.45
Previous Weekly High 1510.16
Previous Weekly Low 1436.96
Previous Monthly High 1452.72
Previous Monthly Low 1382.02
Daily Fibonacci 38.2% 1512.75
Daily Fibonacci 61.8% 1505.76
Daily Pivot Point S1 1499.15
Daily Pivot Point S2 1482
Daily Pivot Point S3 1469.54
Daily Pivot Point R1 1528.75
Daily Pivot Point R2 1541.21
Daily Pivot Point R3 1558.36

 

 

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