Gold price needs to move above the level of 1300, but under the current circumstances it looks extremely difficult for this to happen
The gold price has lost its shine and it is trading lower due to the strength in the dollar index. The year to date performance for the yellow metal has been lackluster, it is up only 0.31%.
The interesting fact is that despite a subdued interest for the riskier assets, we are still not seeing any upward movement in the gold price and this is because the earning season has delivered strong results for this quarter. Apart from the US retail sales number, the economic data in the US has been robust and investors are finding it difficult to believe how the Fed is going to keep its current monetary policy.
The US-China trade war also appears to be back on track and this was one of the key reason that the gold price surged previously. However, we are not out of the wood yet because the Chinese media has signaled a tougher stance on the trade dispute. If we do see some sort of reaction from China, the first impact of this could be seen in the gold price.
Speaking from the price action perspective, it seems like that the price doesn’t have strong momentum. This is the reason that the price cannot cross above the critical level of 1300.
In terms of technical analysis, the gold price is trading below the 50 and 100-day moving averages but above the 200-day moving average. This means that the bulls have lost control of the price but there is still some hope for them to get the power back because the price is still above the major moving average, the 200-day SMA. The near term support is at 1266 and the resistance is at 1303.