On Wednesday, the price of gold declines amid growing investor risk appetite. Recently American indices renewed their all-time highs. Asian indices hit 7-month highs today.
The US dollar limits the scale of development of the correctional wave in gold. Since the beginning of the day, the dollar index has dipped more than 0.3%, supporting all commodity assets. They are becoming more accessible to investors who own other currencies.
Support for gold may also come from growing tensions between the US and China. The day before, Donald Trump stated that he did not want to talk to China so far and was postponing further trade negotiations for an indefinite period. He has not yet decided the further fate of the interim agreement. White House chief of staff Mark Mendoza stated that the US trade representative is currently in talks with China to implement earlier agreements. The US is not satisfied with the volume of purchases of certain goods and services in the 1st half of the year.
In the afternoon, the market awaits the publication of the minutes of the last FOMC meeting. Softer statements by the meeting participants may further weaken the USD, which will have a positive impact on gold.
A local downward corrective movement is developing on the chart. The closest target is the level 1980.00. At this level we can expect the formation of reversal signals at lower time intervals and the resumption of upward movement.
The main scenario - growth from 1980.00 to 2010.00.
An alternative scenario - a breakdown of support at 1980.00 and a decline to 1692.00.
The current fundamental outlook is neutral. We consider longs with moderate risks from 1980.00.
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