Trump's recent comments, which bear the prospect of reconciling with China after lifting tariffs by both on each other’s products, eased investors' fears and helped stop gold price gains to move towards $1293 an ounce after a stronger gain reached to $1303 per ounce. Overall, the bullish momentum for yellow metal prices is still supported by growing US-Chinese trade tensions. Trump has imposed more tariffs on China's products worth 200 billion dollars and China has responded with tariffs of US $60 billion on US products. These developments have contributed to investors' safe haven purchase of gold and Japanese yen and the abandonment of risk appetite. The bullish momentum for gold will strengthen and the upward movement will be confirmed with a stability above the psychological resistance of $1300.
The Federal Reserve Board kept the interest rate unchanged as expected and indicated it was unlikely to raise or lower interest rates in the coming months amid signs of renewed economic health while at the same time inflation was still unusually low. The Bank's policy statement highlighted its continued failure to raise the annual inflation rate to at least 2%. The statement may have raised expectations that a change in the next Fed interest rate is a rate cut to stimulate inflation or growth.
The recent gains of the yellow metal were supported by weak Chinese manufacturing numbers, which has increased investors' appetite for safe havens, led by gold.
Technically: If Gold prices stabilized today below $1300 will increase the bearish momentum. The nearest support levels will be 1288, 1277 and 1268 respectively, which support the strength of the bearish trend. On the upside, the nearest resistance levels are 1305, 1312 and 1325, respectively. We still prefer to buy gold from every bearish bounce.
In terms of economic data: the yellow metal will all focus on the US dollar level. Gold will also be affected by investors' risk appetite. Gold is one of the most important safe havens.
