Gold has retracted higher after a lacklustre US equity market open
- Gold is trading 0.3% higher today as positive risk sentiment slows.
- There is a bear flag forming on the 30-minute timeframe.
The gold market lost some 1.74% of its value yesterday as a big move into risk assets pushed prices lower.
Gold was not the only safe haven to suffer as losses were noted in JPY, CHF and bonds.
The sentiment turned as US ISM non-manufacturing PMI beat expectations. This also justified the Fed's "wait and see" policy.
The US data as improved of late with GDP and employment data also beating analyst estimates.
Another reason investors are happier is the improved sentiment from both China and the US surrounding the trade deal. The two parties have both said they are looking for a venue to sign the phase one part of the deal. There were also some reports that tariff concessions may be made by both sides to push the deal through.
Longer-term, issues surrounding the US administration persist. The Democrats are still pushing ahead with their bid to impeach current US President Donald Trump.
If this situation develops then we could see another rally in gold prices but for now, it seems investors are happy to put their cash into risk assets.
On the daily chart, the main support level to watch out for is the consolidation low of USD 1459.23. If this level gets taken out it will make a lower high lower low pattern which could confirm the bearish scenario.
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Author
Rajan Dhall, MSTA
FX Daily
Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.
