Gold looks to $1210 ahead of US data

30 August, 2018

Stalled US dollar bounce combined with negative European equities, Treasury yields underpin. Volatile within $ 5 range ahead of the US core PCE data.

Gold (futures on Comex) is seen trading quite choppy so far in Europe, having managed to stay above the near-term support located near $ 1206 region, as the focus shifts towards the US core PCE price index for fresh direction.  

The mixed trading seen in the yellow metal is mainly in response to the looming US-China trade concerns, which keeps the sentiment under the greenback buoyed while the renewed tensions surrounding the Emerging Market (EM) economies, with the Turkish Lira resuming the declines, keeps the downside in check. The Lira is down 9% so far this week against the US dollar.

The re-emergence of the Turkish currency-crisis ignited risk-off trade on the European equities, and hence, markets rush to safety in the traditional safe-haven, gold. However, it remains to be seen if the prices can sustain the bounce, as upbeat US PCE inflation data could trigger fresh USD buying across the board and knock-off gold back to the 1206 support area.

The Swissquote Bank Research Team notes: “Long positions above 1202.00 with targets at 1210.00 & 1214.00 in extension. Below 1202.00 look for further downside with 1196.50 & 1192.50 as targets. The RSI is mixed with a bullish bias.”

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