XAUUSD, H1
U.S. equities were swept lower with global stocks after yet another round of $200 bln in tariffs were prepped by the U.S. and China vowed to keep pace, as the trade war escalated yet again. Congress also moved to reinstate bans on China’s ZTE U.S. component purchases. China warned it would counter with “qualitative and quantitative” measures. The news hit China related indices returning from a holiday break particularly hard amid sharp declines on the HK Hang Seng -2.7%, Shanghai Comp -3.7% and the China CSI 300 -3.5% (2-year lows).
Meanwhile, as USD benefits so far today, Gold Futures drifted on 2018 lows. The XAUUSD bottomed so far at R3, at $1,270.30, down from overnight highs of $1,286.50. The move lower came as the USDIndex rallied to 11-month highs of 95.00 area and on reports of technically driven selling.
In addition, general commodity price weakness has helped to drag gold prices lower. The move is a bit counter-intuitive given gold’s safe-haven status amid this morning’s global risk-off backdrop, as the US./China trade spat heats up. Next real support for Gold comes at November’s low at the round $1,260.00 level, while the next support will be at the confluence of December lows and 200-Week SMA, at $1,236.00. Next Resistance is set at the peak of the day and latest up Fractal, at $1,284.00.
The technical picture suggests further negative momentum despite the latest bullish hourly candle, as RSI is at the edge of the oversold area, MACD oscillator increases to the downside above its signal line and Volume remains high.
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Andria Pichidi
Market Analyst
HotForex
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