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Gold regains lost ground due to weakening USD

During Asian trading session gold moved to the green zone (+ 1.3%). Gold was supported by the USD index dynamics (-0.25%) and geopolitical news.

 

US Secretary of State Mike Pompeo stated on Wednesday night that Hong Kong is no longer eligible for its special status under US law. The city may lose the status of the main financial center of Asia. Pompeo also noted that as part of the response, Donald Trump may cancel the previous agreements in the field of trade and impose sanctions against individuals and organizations involved in the suppression of civil liberties in the region.

 

Experts do not exclude possible retaliatory actions from China, including the introduction of restrictions on imports from the United States.

 

Despite the growing tension in relations between the US and China, global stocks are kept in the green trading zone. Investors focused on signs of economic recovery in the regions amid weakening quarantine measures. The growth of major indices limits the possibilities for further recovery of the cost of precious metals.

 

In the economic calendar today, news from the United States will be in the spotlight. Report on basic orders for durable goods, weekly data on initial applications for unemployment benefits and secondary estimates of US GDP for the 1st quarter are expected to be published.

 

Having tested the level of 1695.00, the price resumed its upward movement. The immediate goal for the retreat is the level of 1725.00. At this level, we can expect the formation of reversal formations and the beginning of a new bearish wave.

 

Resistance Levels: 1725.00, 1735.00, 1750.00;

 

Support Levels: 1695.00, 1670.00, 1645.00.

 

The main scenario - resistance testing at the level of 1725.00 and a decline in the direction of 1695.00.

 

An alternative scenario - a breakdown of resistance at the level of 1725.00 and an increase towards 1735.00.

 

The current fundamental outlook is neutral. We still prioritize shorts. Entry points should be expected at the levels of 1725.00 and 1735.00.

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