Gold continues strengthening amid economic crisis in China, where within the first few minutes of trade the CSI300 index fell by almost 7% thus forcing the authorities to stop operations on the stock market.
In addition, markets are worried about Chinese exchange reserves that in 2015 shrank by 512 billion Dollars. According to experts, the biggest chunk of it was spent trying to artificially support of the Yuan. The Chinese government also introduced limits on Dollar purchases thus trying to stabilise the national currency.
Therefore, due to falling oil prices and instability in China the gold is likely to keep strengthening in the near terms.
Support and resistance
Support levels: 1097.66.
Resistance levels: 1112.97.
Long positions can be opened from the level of 1100.00 with the target at 1147.00 and stop-loss at 1090.00.