Gold finding support into the Brexit vote, suffocating below the pivot
- Gold prices have entered a bearish phase on the charts, albeit remains in a consolidative phase as investors stay on the sidelines ahead of Brexit, trade and global growth-related risks.
- Gold is currently trading at $1,288/oz, down from a high of $1,294.85/oz and slightly up from a low of $1,286.67/oz.
- Gold futures finish lower for the first time in 3 sessions.
Gold has wobbled within the wider consolidation of the 2018 bullish trend as we head into the Brexit vote, although taking its cues from optimism on Chinese authorities offering some solace to investors with promises of various implementation of support for the Chinese economy.
China measures supporting risk on
The People’s Bank of China said that it would increase efforts to spur their economy by improving credit availability for smaller companies. There was also a pledge by the Chinese Ministry of Finance to cut taxes and ramp up infrastructure spending. As a result, global stocks picked up, and on Wall Street, the Dow Jones Industrial Average DJIA climbed 132 points, or 0.6%, to 24,042, and the S&P 500 index added 24 points, or 0.9%, to 2,606 while the Nasdaq Composite Index climbed by 109 points, or 1.6%, to 7,015. However, as we move into the Brexit vote, there seems to be some flight to safety taking place. Stocks are off their highs for the session and gold is stabilising at the time of writing.
Gold levels
- Support levels: 1287 1283 1278
- Resistance levels: 1291 1295 1300
The 1300 psychological level is proving a tough target to breach. The price is now back below 1290 and has been testing the robustness of the pivot located at 1291 which has proven its fragility and has given way for a run towards 1280. The 2018 50% Fibo area at 1262 will then come into play. RSI and MACD are still leaning with a bearish bias. On the flipside, a break of the 1300 level opens a run to 1350.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
