Gold completed yesterday's trading with a decrease of 1.8%. Strong pressure was exerted by positive news about the course of trade negotiations between the USA and China, the strengthening of the dollar (the dollar index rose 0.4% on Tuesday) and the growth of the yield on treasury bonds. All these factors traditionally have the strongest effect on the dynamics of the gold prices.
Today, buyers are trying to restore previously lost positions. Quotes are supported by reports of certain disagreements between the US and China regarding the abolition of previously introduced trade restrictions. China insists on the abolition of all previously imposed duties. The United States wants to abandon the introduction of new restrictive measures and keep the current level of duties unchanged. These disagreements may interfere with the conclusion of an interim trade agreement.
The US Treasury yield chart and the dollar index also moved into the red trading zone, supporting the precious metal. Today there is no important news in the economic calendar, so geopolitical news and the situation on stock exchanges will remain in the spotlight. This is a good opportunity to form a corrective movement for gold.
On the chart, the price tested a strong support level of 1480.00. The reaction was quite strong, so today the priority is the development of corrective movement. The closest target is at 1494.00.
Resistance Levels: 1494.00, 1505.00, 1515.00;
Support Levels: 1480.00, 1475.00, 1460.00.
The main scenario is a correction to 1494.00 and the resumption of the downward movement.
An alternative scenario is a breakdown of support at 1480.00 and a decline to 1475.00.
The positive news background locally prevails on the market, therefore, within the day we consider longs in the range of 1480.00-1483.00.
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