Source: Forex Analysis
Gold managed to regain momentum after throwback towards $1320 support area. It is currently heading towards $1350 resistance area. After the break above the Bullish Flag, the bullish run is inevitable. Thus, new highs can be expected.
Gold has been picked as the safe-haven for investment while global equities are getting weaker. The US dollar slightly tumbled amid weak economic reports. The Federal Reserve is expected to keep interest rates unchanged at its next meeting on June 19. However, traders have been speculating on the possibility of key rates cut before the end of this year due to slowing inflation.
The Federal Reserve is feeling the heat from inflation, or its lack thereof and gold bulls believe it’s just another little thing that could push the central bank over the edge on monetary easing. The expectation for a rate cut this year also rose last week after a number of Fed officials, including Chairman Jerome Powell, hinted they were open to easing monetary policy. Gold also extended its gains on worries over the US-China trade war. It raised investors’ interest in gold as a hedge against a possible recession too.
To sum up, gold is expected to maintain the bullish momentum it acquired recently which may lead the price higher towards $1350 and later towards the ultimate target of $1500. As the support area between $1300-20 holds the price, the bullish bias is expected to continue further.
SUPPORT: 1290, 1300, 1320
RESISTANCE: 1350, 1380, 1400
The material has been provided by InstaForex Company – www.instaforex.com