Gold on the bids around $1300 as bulls concentrate more on geopolitics
The news reports signaling the US-EU trade rift and likely renewed geopolitical tensions between the US and Saudi Arabia triggered risk-off.Buyers target 50-day SMA during further upside.
Gold prices are taking the rounds near $1299 early on Tuesday as investors give more emphasis to the latest news reports signaling an increase in global geopolitical tension.
The yellow metal rose to a two-week high on Monday as hostilities in Libya and the US President’s another hit to Iran grabbed market attention. Headlines concerning the Libyan National Army’s march to acquire the capital Tripoli and Donald Trump declaring Iran’s revolutionary guard as a terrorist organization helped the Gold to remain strong yesterday.
During early Tuesday, investors welcomed the development from the UK that favored an amendment rejecting no-deal Brexit.
However, the optimism couldn’t last long after the Financial Times reported that the US is proposing tariffs worth $11 billion on the EU products, including the Airbus.
The risk-off sentiment got additional support when the Trump administration announced a ban on 16 Saudi nationals from entering the U.S. due to their roles in the murder of journalist Jamal Khashoggi. Saudi Arabia is still to respond to the ban and may generate news reports during the day.
Yields on the US 10-year note remained unchanged near 2.519%.
Investors may now concentrate more on the qualitative catalysts like Brexit and the geopolitical plays including the US.
Gold Technical Analysis
Even if 23.6% Fibonacci retracement of August 2018 to February 2019 upside, at $1303, can limit gold’s immediate advances, 50-day simple moving average (SMA) near $1307/08 and seven-week-old descending trend-line at $1315 could question the bullion buyers then after.
Alternatively, $1293 and 100-day SMA level of $1283 can provide immediate supports to the safe-haven ahead of highlighting 38.2% Fibonacci retracement around $1276.
Article by FXStreet