Fundamental analytics

Gold

XAUUSD

On Tuesday, gold kept upward momentum due to increased investor’s interest in risk-free assets.

Major stock indexes finished trading on Tuesday in the red zone, after Trump confirmed his intention to introduce trade duties on a number of European goods, totaling $ 11 billion. These are the White House’s response to EU subsidizing Airbus. Now investors are worried that another aggravation of relations in international trade may further harm the development of the world economy, which continues to actively slow down its growth rates. These concerns were confirmed yesterday by the IMF. The organization lowered its forecasts for the growth rate of the global economy from 3.5%, in January, to 3.3%. As the main reasons for this decision, the foundation noted the difficult situation in world trade and high political uncertainty in many countries.

Growing geopolitical tensions and uncertainties are always a strong support factor for gold, which investors traditionally view as the main protective asset against increased risks.

Today, the market situation has not changed significantly. Investors are very cautious, waiting for important events to occur later. The focus today will be on the ECB meeting and comments by Mario Draghi on monetary policy, the extraordinary EU summit, which will decide the fate of Brexit, and the publication of the minutes of the last FOMC meeting, which was further revised by the regulator on the implementation of monetary policy. Each of these events can have a very strong impact on the dynamics of world markets.

At the second attempt, gold was able to pass the resistance at the level of 1300.00 and gain a foothold above it. This is a strong signal in favor of the further development of the upward movement with the target level of 1310.00. Considering the situation at lower time intervals, it is worth highlighting strong intraday resistance at 1305.00. Breaking of this level will increase the likelihood of testing the scenario with an increase in quotations to 1310.00. But, in case of a rollback of the price from the level of 1305.00, the option with retest 1300.00 will become the priority.

 Resistance Levels: 1300.00, 1303.00, 1310.00;

 Support levels: 1297.00, 1291.00, 1283.50.

The main scenario - a correction to 1300.00 and the resumption of upward movement. An alternative scenario - the breakdown of local resistance 1305.00 and further growth to 1310.00.

The market is dominated by a positive fundamental background, which makes the longs more relevant within a day. Potential entry points should be found at 1300.00



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