Gold prices pick up on risk aversion to approach long-term highs at $1,765
- XAU/USD regains lost ground after bouncing at $1,717 and reaches $1,740 area.
- Gold appreciates on risk aversion as US-China tensions escalate.
The precious metal appreciates on Friday, favoured by the risk-averse trading as the escalation of the Sino-US tensions have boosted demand for safe-haven assets. XAU/USD’s reversal from $1,755 highs on Thursday found support at $1,717 to bounce up and returning to $1,740 area, with eight-year highs, at $1,765 on sight.
Gold appreciates on geopolitical concerns
Bullion prices are marching higher, with equity index in red during Friday’s North American trading session. US President Donald Trump has stirred Sino-US tensions vowing with a strong reaction against China’s intention to pass new security legislation to curb protests in Hong Kong. This comes after the US government blocked chip supplies to Chinese Huawei.
Furthermore, China’s refusal to set a growth target for 2020 reveals the severe damage caused by the coronavirus shutdown in the world’s second economy. This decision has triggered a flight to safety which reflects in lower oil and stocks lower and firmer gold and US dollar.
XAU/USD drawing closer to the $1,765 peak
Gold prices are being capped now below $1,740 intra-day highs, with next potential resistance levels a $1,755 and then long-term highs at $1,765. On the downside, immediate support lies at $1,725 and below here $1,717 and $1,680.
XAU/USD key levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
