Gold: First Meaningful Upside Breakout

Spot gold confirmed the first meaningful upside breakout, as it becomes more clear that U.S. President Donald Trump is playing a mind game with China...

Spot gold climbed 0.8% to $1,730.3 yesterday, up for a third straight session and confirmed the first meaningful upside breakout

It becomes more clear that U.S. President Donald Trump is playing a mind game with China, aiming to divert public attention away from his ineffective response to the coronavirus in the early stages.

In an interview with Fox Business Network, Trump said he was disappointed with China over its handling of the health crisis, threatening that he "could cut off the whole relationship". He also launched new measures against China, as he is "looking at" Chinese companies listed on the U.S. stock exchanges, which do not follow his country's accounting rules.

From a technical point of view, spot gold has confirmed an upside breakout as shown on the daily chart. It has broken above a symmetrical triangle pattern, signaling an end of the consolidation and a resume of bullish trend. The level at $1,685 might be considered as the nearest support, and a break-through from the 1st resistance at $1,748 would open a path to the next resistance at $1,790. Alternatively, losing $1,685 may trigger a pull-back to $1,640.

Source: TradingView, Gain Capital

For intraday as shown on the 1-hour chart, spot gold remains on the upside after breaking above an ascending triangle pattern, targeting April high. Bullish investor may consider $1,723 as the nearest support, with 1st and 2nd resistance likely to be located at $1,743 and $1,748 respectively. In an alternative scenario, a break below $1,723 might trigger a return to $1,711 on the downside.


Source: TradingView, Gain Capital

More from Gold

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.