Fundamental analytics

GOLD: investor’s interest in defensive assets remains high

XAUUSD

Gold ended the trading week on a positive note, thanks to the increased geopolitical risks, against which investors are reluctant to take risks and actively buy traditional defensive assets.

The escalation of the trade conflict between the US and China, the expected resignation of May and the growing uncertainty around Brexit, the elections to the European Parliament, the tense situation in the Middle East and a number of other unresolved problems significantly increase investor interest in gold, the Japanese yen and other safer assets, contributing to their price growth.

The dynamics of the movement of the dollar index, which at the end of last week traded with a decline, plays an important role for gold against the background of the publication of weak domestic statistics, which heightens investors' concerns about a slowdown in US economic activity, against the backdrop of increasing external risks.

There is no important economic news in the US today and in the economic calendar. Therefore, we expect fairly calm trading with the predominantly side trend.

On the chart from the level of 1279.50 a new bullish wave is developing, the immediate target for which is the level of 1289.00. This is a fairly strong intermediate level of resistance from which we can expect the formation of the next rolling back motion in the area of ​​1279.50.

Resistance Levels: 1289.00, 1300.00, 1310.00;

Support levels: 1279.50, 1270.00, 1265.00.

The main scenario - growth to 1289.00 and downward correction.

The alternative scenario is a decline to 1279.50 from current levels.

The market has a moderately positive news background globally, which will provide price support in the medium term. But, today is a day off in the USA, therefore, the scenario with the development of the outset within the boundaries between the levels of 1279.50 and 1289.00 seems more likely to be worked out. Accordingly, intraday we can buy and sell from the borders of the marked price channel.

 

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