Gold: First Meaningful Upside Breakout
George Lam May 15, 2020 2:49 AM
Spot gold confirmed the first meaningful upside breakout, as it becomes more clear that U.S. President Donald Trump is playing a mind game with China...
Spot gold climbed 0.8% to $1,730.3 yesterday, up for a third straight session and confirmed the first meaningful upside breakout.
It becomes more clear that U.S. President Donald Trump is playing a mind game with China, aiming to divert public attention away from his ineffective response to the coronavirus in the early stages.
In an interview with Fox Business Network, Trump said he was disappointed with China over its handling of the health crisis, threatening that he "could cut off the whole relationship". He also launched new measures against China, as he is "looking at" Chinese companies listed on the U.S. stock exchanges, which do not follow his country's accounting rules.
From a technical point of view, spot gold has confirmed an upside breakout as shown on the daily chart. It has broken above a symmetrical triangle pattern, signaling an end of the consolidation and a resume of bullish trend. The level at $1,685 might be considered as the nearest support, and a break-through from the 1st resistance at $1,748 would open a path to the next resistance at $1,790. Alternatively, losing $1,685 may trigger a pull-back to $1,640.
Source: TradingView, Gain Capital
For intraday as shown on the 1-hour chart, spot gold remains on the upside after breaking above an ascending triangle pattern, targeting April high. Bullish investor may consider $1,723 as the nearest support, with 1st and 2nd resistance likely to be located at $1,743 and $1,748 respectively. In an alternative scenario, a break below $1,723 might trigger a return to $1,711 on the downside.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.