Gold clings to 21-DMA amid less active markets
|- Gold prices fail to portray USD pullback amid trade/political jitters.
- Lack of major data/news during the Asian session limits market moves.
Gold carries the 3-week old lower high formation forward as it clings to 21-day moving average (DMA) during Wednesday’s less active market hours ahead of the European session.
The US Dollar (USD) failed to hold previous strength, backed by upbeat data, as latest doubts surrounding the US-China trade deal and worsening relations between the US and Iran weigh on the greenback.
Though, the bullion buyers remain cautious of further bets on the US Federal Reserve rate cuts amid recent improvement of data/lack of major catalysts.
While the US President Donald Trump’s readiness to levy fresh tariffs on China and the US-Iran tensions can keep spicing up the risk aversion, further improvement in the US data and less dovish comments from the Fed may cap the safe-havens.
On the economic calendar, inflation numbers will direct future monetary policies concerning the European Central Bank (ECB), the Bank of England (BOE) and the Bank of Canada (BOC) whereas housing market numbers from the US can act as a second-tier clue to follow.
Technical Analysis
FXStreet Analyst Ross J. Burland spots the bullion’s sustained trading beyond $1,400 as a key positive element favoring the bulls:
The 1400 psychological level is holding up which is just as well for the bulls, as a couple of dollars, a break of the 23.6% Fibo of the latest swing lows and highs could open up an onslaught to the downside. Below that level, the $1,373/76 zone meets the 19th June spike correction lows and the 38.2% Fibo of the same swing ranges. On a break back to the upside, 1410, 1419 and 1424 are all prior highs and lows which are guarding a run to the 1440 objective.
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