Gold keeps the red amid Yuan slide

Gold is flashing red despite Yuan devaluation and rising fears of Sino-US trade war.
Oversold conditions might yield a minor corrective rally.

Omkar Godbole FXStreet Contributor

Gold, widely considered an antithesis to fiat currencies, finds no takers despite rising odds of US-China currency war.

At press time, the yellow metal is trading at $1,218.70, having clocked a one-year low od $1,211.65 yesterday.

Prices have dropped more than 10 percent in the last three months despite US-China trade war, triggering speculation the yellow metal is losing its safe haven appeal.

Further, it is showing no signs of life even though the US and China are closing on a full-blown currency war. The People’s Bank of China (PBOC) is increasingly favoring a weaker Yuan and that could force the Trump administration to retaliate in kind. Moreover, President Trump has already expressed concerns regarding Fed rate hikes.

That said, the oversold technical conditions, as shown by the relative strength index (RSI) could put a bid under gold prices.

Gold Technical Levels

Resistance: $1,223 (50-hour MA), $1,230 (resistance on the hourly chart), $1,239 (200-hour MA).

Support: $1,215 (session low), $1,211 (previous day’s low), $1,200 (Psychological level).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	High
1H	Bearish	Neutral	Low
4H	Bullish	Neutral	Expanding
1D	Bearish	Oversold	High
1W	Strongly Bearish	Oversold	Expanding
Updated Jul 20, 02:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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