- Gold caught some fresh bids on Friday amid a further escalation in the US-China tensions.
- A goodish pickup in the USD demand turned out to be the only factor capping the upside.
Gold regained some positive traction on the last trading day of the week and recovered a part of the previous day's sharp fall to one-week lows. The commodity was last seen trading near the $1735 region, below daily swing highs, touched during the early European session.
Concerns over worsening US-China relations took its toll on the global risk sentiment and provided a goodish lift to the precious metal given its perceived safe-haven status. Diplomatic tensions between the world's two largest economies escalated further on reports that China is planning to impose national security laws in Hong Kong.
The US President Donald Trump was quick to respond and threatened a strong reaction if the law is passed. This comes on the back of the US Senate passing a bill that could block some Chinese companies from selling shares on the American stock exchanges and fueled concerns about a major US-China tussle.
Investors' nervousness was evident from a weaker tone surrounding the equity markets. The global flight to safety was reinforced by a fresh leg down in the US Treasury bond yields, which further benefitted the non-yielding yellow metal. Meanwhile, a broad-based greenback strength turned out to be the only factor that capped the dollar-denominated commodity.
From a technical perspective, the metal on Thursday showed some resilience below the $1720 horizontal resistance breakpoint. The subsequent positive move points to the emergence of some dip-buying at lower levels and supports prospects for additional gains. Hence, a climb back towards the $1750-52 region, en-route multi-year tops, now looks a distinct possibility.
Technical levels to watch
|Today last price||1734|
|Today Daily Change||6.29|
|Today Daily Change %||0.36|
|Today daily open||1727.71|
|Previous Daily High||1749.14|
|Previous Daily Low||1717.34|
|Previous Weekly High||1751.8|
|Previous Weekly Low||1690.05|
|Previous Monthly High||1747.82|
|Previous Monthly Low||1568.46|
|Daily Fibonacci 38.2%||1729.49|
|Daily Fibonacci 61.8%||1736.99|
|Daily Pivot Point S1||1713.65|
|Daily Pivot Point S2||1699.6|
|Daily Pivot Point S3||1681.85|
|Daily Pivot Point R1||1745.45|
|Daily Pivot Point R2||1763.2|
|Daily Pivot Point R3||1777.25|
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