Gold: First Meaningful Upside Breakout

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.

Source: TradingView, Gain Capital

More from Gold

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account