Gold bulls looking at $1,353 on weak US stocks, geopolitical tension remains
- The geopolitical crisis in Syria and US-China trade war remains the main driver for gold.
- Gold bulls looking at the $1,353 level after finding support at $1,333 level.
Gold is trading at about $1,345 a troy once, up 0.77% on Friday as the geopolitical crisis in Syria remains the main driver.
The yellow metal found support at the $1,333 level earlier on Friday and is now aiming for the $1,350 psychological level. The mild US dollar demand, weaker US bond yields as well as a technical rebound is helping gold to gain traction.
This week gold tested the 1375.70 level as President Trump was planning to launch an airstrike on Syria. However gold retreated from weekly highs as the threat of the US attack became less imminent than previously thought. US President tweeted: “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”
Meanwhile, US stock indices are trading lower on Friday’s trading which is also benefitting the safe-haven gold.
The risk-on mood is set to stay very sensitive to the developments of the US-Russia tensions over Syria which seems to have overshadowed the trade war tensions between US and China. However the trade dispute might not be far from over as Gao Feng, commerce ministry spokesman in China, said that “it would be misleading to say Xi's pledge this week was a concession to the United States. China will not hesitate to fight back if the U.S. escalates the trade spat.” On Tuesday, Chinese President, Xi Jinping said that he was ready to push free trade and re-assured foreign investors.
“The midweek rally on high volume, responding to US threats of military action in Syria, was accompanied by a surge of new money into gold. But the apparent easing of tensions combined with a quick rejection at the January and February twin peak highs saw much of that money come out of gold yesterday. Without a new catalyst to take out overhead resistance at $1,370, I expect gold to drift lower but still maintain some political-risk premium. There's minor trendline support at $1,330 that I expect is tested in the week ahead.” commented Ken Morrison, editor of the newsletter Morrison on the Markets.
Gold 4-hour chart:
“Immediate support is pegged near $1335 level, below which the slide could get extended even below $1330 area towards retesting $1326-24 strong horizontal support. On the upside, sustained move beyond $1341-42 area could lift the commodity back towards $1353 supply zone, which if cleared might negate any near-term bearish bias and pave the way for an extension of the bullish trajectory.” said FXStreet’s own Haresh Mengani.