Gold rebounds sharply from 2-week lows

  • The yellow metal bottomed at the beginning of the US session amid a stronger US dollar at $1,187.50 and rebounded. 
  • Gold rallied almost $10 and approached $1,200. 

Gold bounced sharply after hitting $1,187/oz and climbed to $1,197.50, a fresh daily high. The move to the downside took place on the back of a stronger US dollar on headlines indicating an escalation in the trade war between US and China. Then the greenback lost momentum and gold bounced also amid a rally in crude oil and equity prices. 

The metal is about to post the fourth consecutive daily close slightly below the $1200 area. A consolidation on top could signal more gains ahead but while it remains under that figure, it still looks vulnerable. 

XAU/USD Technical perspective

The metal retains the negative stance seen on previous updates, as, in the daily chart, it keeps developing below a flat 20 SMA, while the Momentum indicator heads lower almost vertically, well into negative territory, and the RSI keeps hovering around 45”, says Valeria Bednarik, Chief Analyst at FXStreet.

In the short-term, the 4 hours chart, shows risks skewed to the downside, according to Bednarik, “as spot spent the day consolidating below all of its moving averages, while the Momentum extends its decline within negative readings and the RSI moves back and forth, also below its mid-line.”

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