Gold increased slightly in Asia on Friday amid rising tensions between the US and China over Hong Kong's new national security law.
On Thursday, Chinese authorities announced a new law regulating national security in Hong Kong. Later, a bill was introduced in the US Senate on both parties to impose sanctions on officials and organizations involved in the implementation of the national security law in Hong Kong. Sanctions will also target banks working with such organizations. Donald Trump and the US State Department criticized and threatened the Chinese authorities.
Speaking at the National People's Congress of the People’s Prime Minister, Li Keqiang stated that for the first time in many years, China has been refusing to set a target level of GDP growth due to the uncertainty and problems associated with the coronavirus pandemic.
Considering the above, the main stock indexes moved into the red trading zone. Investors came back to gold and other defensive assets, fearing increased geopolitical and economic risks.
Yesterday, the price pushed local support at 1729.00. Now the bears are trying to keep the price below this mark. Therefore, we consider the scenario with the further development of a downward movement as a priority. However, if buyers manage to gain a foothold again above the level of 1729.00, the next target for the price movement will be the mark of 1750.00.
Resistance Levels: 1729.00, 1750.00, 1765.00;
Support Levels: 1715.00, 1695.00.1670.00.
The main scenario - a decline in the direction of the level of 1695.00.
An alternative scenario - a consolidation above 1729.00 and growth towards 1750.00.
The current fundamental outlook is moderately positive. Today we would consider shorts at the levels of 1738.00 and 1750.00.
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