Gold rebounds from three-month lows, further gains may lie ahead
Gold prices extend modest gains for a third day in a row, after reaching a three-month low of $1,445.50 earlier in the week. Spot gold has encountered a local resistance around $1,477, which is standing on the way to the 100-DMA. The short-term technical picture has improved somehow after a bounce, but the precious metal remains vulnerable to further losses as long as the prices remain below the $1,500 psychological level.
Despite the recent talks about a so-called phase one deal between the US and China, uncertainty persists on the trade front. Moreover, there are now reports that trade talks have hit a snag over farm purchases, which coupled with the recent contradictory Trump’s comments on tariffs and China raises the risk of another escalation in the long-standing trade dispute between the world’s two largest economies.
As dynamics in gold prices shows, a negative trade-related scenario has not been priced in by gold traders, so there is a possibility that the yellow metal could resume the rally should the two countries fail to deliver good news any time soon. In this scenario, the bullion may regain the above mentioned moving average and target the $1,500 handle im the medium term.
Despite the recent talks about a so-called phase one deal between the US and China, uncertainty persists on the trade front. Moreover, there are now reports that trade talks have hit a snag over farm purchases, which coupled with the recent contradictory Trump’s comments on tariffs and China raises the risk of another escalation in the long-standing trade dispute between the world’s two largest economies.
As dynamics in gold prices shows, a negative trade-related scenario has not been priced in by gold traders, so there is a possibility that the yellow metal could resume the rally should the two countries fail to deliver good news any time soon. In this scenario, the bullion may regain the above mentioned moving average and target the $1,500 handle im the medium term.