Gold rebounds after breaking below 1700
- 2020-05-29
Price of the yellow metal opened around 1730 and brought about the bullish trend until Wednesday, breaking the huge floor 1700 down to 1763. A sharp rebound was seen on Thursday given political uncertainties broke out between U.S. and China, over Hong Kong’s national security issue. The dip earlier this week appeared to be a consequence of a healthier dollar, as we see dollar index rose at 99.4. Not to mention certain level of recovery on the European stocks. However, as the economic tension between two biggest economy arose plus the U.S. government announced a total of 41 million locals turned jobless, which drove investors to hoard safe haven asset in turn lifting the price.
Gold has been trading rather side-ways post emerging uptrend between the 1717 and 1727 level, trapped between 23.6% and 50% of the Fibonacci retracement on a H4 chart. Given the rising tension and a decline in the USD index, would be less likely to witness a significant backdrop in the near future. Moreover, major central banks look to be passive on expansionary monetary policy. Volatility may be seen in Asia night session today as Fed Chair Jerome Powell gives talk and market participant may decipher any clues on interest rate movements.
Pivot point 1706.58
S1 – 1697.65 R1 – 1719.27
S2 – 1684.96 R2 – 1728.20
S3 – 1663.34 R3 – 1749.82
Given the sideway trading trend after the upbound, suggestions to enter long at low price opportunity at 1717.30 with stop loss at 1710 and take profit at 1723 to aim for minor profits.
Analyst: Mr Ronald Wu, Independent Analyst