Demand for gold grows amid growing tensions between the US and China
Gold is gradually recovering its previously lost positions amid falling expectations of investors regarding the results of a new round of trade negotiations between the US and China.
Stock markets reacted negatively to Washington’s decision to expand the export blacklist of Chinese companies. Many investors believe that this step will complicate the process of conducting trade negotiations, which will take place on October 10-11. Today, the Ministry of Commerce of China called on the White House to remove Chinese companies from the blacklist. Earlier, the South China Morning Post reported that the Chinese delegation decided to shorten their stay in Washington by one night.
Against this background, gold, as the main defensive asset, is again in demand among investors who seek to diversify their risks in case of further deterioration of the situation in international trade. On Wednesday, the World Bank revised its forecasts for the growth of the world economy for 2019 downward, from 2.6% to 2.5%.
On the chart, buyers are gradually increasing upward pressure at the level of 1510.00. This increases the likelihood of a breakdown of this mark and further development of the upward movement in the direction of the level of 1525.00.
- Resistance Levels: 1510.00, 1525.00, 1533.00;
- Support Levels: 1500.00, 1485.00, 1475.00.
The main scenario is a breakdown of resistance at 1510.00 and an increase in the direction of 1525.00
An alternative scenario is a breakdown of support at 1510.00 and a decline to 1485.00.
A positive news background locally prevails on the market. Bullish signals dominate the chart. Inside the day we consider longs from the levels of 1505.00 and 1500.00.