Gold prices whipsawed higher, initially moving lower but rising following surprise tariffs announced by President Trump on Thursday. Prices surged to the July highs and are poised to break out. US yields tumbled, following softer than expected US ISM manufacturing data. The contraction in global growth is sharply weighing on this sector.
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Gold prices moved whipsawed higher closing near 6-year highs. Prices sliced back above the 10-day moving average, which is now seen as support near the 10-day moving average near 1,425. Target support on the yellow metal is seen near the 50-day moving average at 1,386.Resistance is seen near the July highs at 1,453. Short term momentum turned positive as the fast stochastic generated a crossover buy signal. Medium term momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory which points to consolidation.
Riskier assets whipsawed along with gold as the surprise tariffs President Donald Trump announced Thursday against $300 billion or so of Chinese goods takes the trade dispute between the two countries to a new level. The president’s announcement jolted markets, which had bounced back sharply off Wednesday’s disappointing Fed rate cut only to have their legs cut out from underneath by news of a heightened trade war. Trump’s move means that all Chinese goods entering the U.S. will be subject to some sort of duties.
This article was originally posted on FX Empire
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