Gold prices edged higher on Thursday, as simmering Sino-American trade tensions underpinned the US dollar, while bullion investors looked for a direction after the minutes of the US Federal Reserve meeting indicated that rates will remain unchanged.
The price of spot gold rose by 0.4% to 1,278.32 USD per ounce by 08:15 a.m. ET, after falling to its lowest since May 3 on Tuesday at 1,268.97 USD per ounce. Meanwhile, the US gold futures were 0.3% higher at 1,277.60 USD per ounce.
The short-term effect of the US-China trade was is driving the US dollar index higher in general and that doesn’t help gold. During mid-May, plenty of fresh buying went into long positions at higher levels, and since then open interest on the CME has declined, which implies that some of those longs got out and are on the defensive.
The global stock markets sank deep into the red today, which definitely supports the price of gold and other safe-haven assets.
The price the precious metal was reflected in the holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund. Holdings have declined nearly 7% so far this year. SPDR holdings edged 0.1% lower to 738.81 tonnes on Wednesday.
Technically, the spot gold is expected to test a support at 1,264 USD per ounce, a break below which could open the way towards 1,244 USD.
Among other precious metals, silver fell by 0.2% to 14.42 USD per ounce, while palladium edged 0.1% lower to 1,313.50 USD per ounce. Platinum rose by 0.4% to 802.10 USD per ounce, after touching its lowest level since February 15 at 792 USD earlier in the session.
Gold price analysis
Gold regained positive traction on Thursday and continued scaling higher through the mid-European session, retesting the overnight swing high near the 1,277-1,278 USD supply zone.
The mentioned region coincides with 23.6% Fibonacci retracement level of the 1,303-1,269 USD recent slide and should now act as a key pivotal point for any further near-term recovery.
The intraday positive move has now lifted the precious metal above 100-hour SMA for the first time in around a week and support prospects for additional gains amid a fresh wave of global risk-aversion trade. Technical indicators have already started gaining positive momentum on the 1-hourly chart and recovering within the negative territory on 4-hourly/daily charts, reinforcing prospects for a follow-through buying.
Technically, the gold bears have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at 1,300.00 USD, while the bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the May low of 1,267.30 USD.
First resistance is seen at this week’s high of 1,278.80 USD and then at 1,287.00 USD.
First support is seen at this week’s low of 1,269.00 USD and then at 1,267.30 USD.
Silver price analysis
July silver futures bears have the solid overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at 15.00 USD per ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175.
First resistance is seen at 14.50 USD and then at 14.555 USD.
First support is seen at this week’s low of 14.35 USD and then at 14.30 USD.