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XAUUSD - Remains Well Supported at $1500 as IMF Warns on Trade Wars

   

 

XAUUSD - Remains Well Supported at $1500 as IMF Warns on Trade Wars
 
In the last two weeks gold has found some support at the current key $1500 level which has held it up again in the last 24 hours after falling sharply. Only three weeks ago gold fell sharply from its multi year highs above $1550 down back below the $1500 level however it has been well supported and it has kept its head about this key level. It was support from $1500 that allowed it to make a run and push higher to achieve a six year high above $1550 before the recent drop down to $1500.

Should gold break lower through $1500 and remain below there, it may starts to meet resistance at this level. At the start of August, gold surged higher off support at $1400 towards the recent six year high above $1530, before its more recent surge higher yet again.

It was well supported by the $1400 level throughout July, and any time it has moved lower, it has been quickly bought up and supported, pushing it back above this level. If gold was to decline from its current highs, you could reasonably expect it to receive support from $1400 again. In late June, gold enjoyed a strong surge higher through resistance at the $1350 level, which had been repelling prices despite multiple rallies to push through that level, after having provided stiff resistance to gold on numerous occasions in the last couple of years. The $1350 level is also likely to offer support to gold should it decline from its current levels.

Leading up to its recent range below $1350, gold surged higher to move sharply away from the key $1270 level, through any resistance at $1300 and to a then one year high just shy of the $1350 level. It had been content for the week or so prior to enjoy support from the $1270 level, a level which had ably support the precious metal for the last six weeks or so, despite its best efforts to push lower.

The head of the International Monetary Fund (IMF) Christine Lagarde has said in a recent interview that the trade war between the United States and China is weighing on the global economy ‘like a big, dark cloud’.  It has been reported that trade talks will resume next month, after the threats of tariffs have bounced back and forth for more than 12 months and have severely impacted financial markets around the world.  Ms Lagarde asserted that the ongoing tariffs are forecast to remove 0.8% off global economic growth in 2020.  “That’s a massive number.” Lagarde said in an interview. “It’s fewer jobs. It’s less business going on. It’s less investment. It’s more uncertainty. It weighs like a big, dark cloud on the global economy.  ”Despite talks being set to resume, Lagarde said, “The longer this lingers, the more uncertainty sinks in.  And if you’re an investor, if you’re an enterprise, whether small, medium size or big, you’re not going to invest, you’re going to wait. You’re going to sit and wonder where the supply chains are going to be organized.”

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