So far it has been a great year for gold. It may have dropped a few times during the first half, but the prices began to gain momentum. Rising geopolitical tensions marked a rally in prices for the yellow metal.
As the week began, week gold prices fell over positive data coming in from the US.
The initial weekly jobless claims fell to 210,000 in the week to Saturday, coming in better-than-expected, the U.S. Labour Department said.
The market consensus called for initial claims to be at 215,000 following a revised level of 219,000 reported in the previous week.
Gold prices fell following the data but still held above the key $1,500 an ounce level
But later in the week, tit-for-tat trade measures between the US and China fuelled concerns and resulted in a rise in gold prices.
There were a lot of twists and turns witnessed by gold. US china talks on one hand and 28 Chinese firms being blacklisted by Trump on the other hand- Moreover, visa restrictions were imposed on Chinese officials and this soured the sentiments and was paying the way for the risk-off situation to be back.
Following this, risky assets such as equities became more volatile while safe-haven assets such as gold saw increasing demand.
All in all, given the developments above, gold has resumed its traditional role as a safe-haven asset and investor buying interest has returned.
We need to see a breakthrough $1519 to bring about a clear bullish continuation pattern. Given the failure to overcome that high, a decline below $1500 would point towards a possible bearish phase coming into play. Until then, the recent recovery still remains intact despite a move below trendline support.
Important targets- Sell spot gold below $1518. It is closed above $1519 then it opens the prospect for a $1535 mark.
Any dip can be seen as a good opportunity to buy.
Prithviraj Kothari is author of this article. Find more information about Prithviraj kothari.