Gold opens a new trading week with upside gap after attacks on Saudi refineries and the publication of weak macroeconomic data from China.
A drone attack at two refineries in Saudi Arabia broke out a major fire. The kingdom was forced to halve oil production, while the global decline in oil production was about 5%. Oil prices reacted by an unprecedented increase of more than 10%, and stock indices moved into the red trading zone.
The Hussite Yemeni rebels claimed responsibility for the attack, but US officials blamed Iran for the attack. Investors' interest in defensive assets has grown significantly amid the worsening geopolitical situation in the world.
Another factor in the growth of gold quotes was the weak statistics from China. According to the report, industrial production in August grew 4.4%, after growing 4.8% a month earlier. The volume of investments in fixed assets increased by 5.5%, against 5.7% a month earlier. Experts attribute the decline in economic activity with the trade conflict between Beijing and Washington and expect from the People's Bank of China new measures to stimulate the economy.
On the chart, trades are still held in the horizontal range, with borders at the levels of 1485.00-1523.00. Now the price is in the middle of this range and with almost equal probability it can continue to move both up and down. Trading decisions should be made only when the price is within the trading range.
Resistance Levels: 1523.00, 1545.00, 1555.00;
Support Levels: 1485.00, 1455.00, 1430.00.
The main scenario is the range of 1485.00-1523.00.
An alternative scenario is a breakdown of resistance at 1523.00 and an increase to 1555.00.
A positive fundamental background locally prevails on the market, but on the chart the price is now in the middle of the horizontal range 1485.00-1523.00. Possible longs should be considered only after the formation of a retreat to the mark of 1485.00.
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