Gold short term bearish in nature and is expected to break $1,300 due to psychological factors
29-05-2018 10.35 AM
Gold prices traded lower on Monday, falling further below the $1,300 level in the midst of diminishing safe haven demand on the back of lessening geopolitical tensions.
Risk enthusiasm was enhanced after U.S. President Donald Trump said on Sunday that a U.S. team had entered North Korea to prepare for a proposed meeting between him and North Korean leader Kim Jong Un.
Italy’s populist parties abandoned their bid to form a coalition government after the country’s President Sergio Mattarella blocked-up the nomination of a euro sceptic finance minister. Investors had worried that the coalition could cause danger to Italy’s membership in the euro zone.
The Fed’s preferred measure of inflation currently sits at 1.9%, just shy of the U.S. central bank’s 2% target. But recent data including two regional manufacturing surveys has stoked expectations for an uptick in price pressures.
The gold prices hold near resistance line which has formed “Falling Wedge pattern”. As this is a daily chart, prices are currently to meet out the resistance area around $1305(31000). In the alternate scenario, once the gold prices break above $1305(31000) then it would turn from negative to positive territory towards $1315-1320(31170-31250).
The prices are unable to break above the level due to selling pressure and continues to push downside side. As a result, it is likely to extend the selling pressure towards $1290-1275(30850-30650) level in the upcoming session.