Trade war effect: Gold may touch $1,390 level as outlook brightens
Escalating trade war between the US and China and shaky global growth outlook has been supporting gold prices in the international markets. Economic indicators are signalling slowdown in the global economy after Donald Trump administration imposed hefty tariffs on China. The World Bank has also slashed its growth forecast for 2019 to 2.60 per cent.
After Feds comments the Dollar Index witnessed profit booking, which boosted gold prices to a one-year peak, before settling at around 3.5-month high.
The $1,350 level will now act as a major resistance for gold in the international markets, while the precious metal will find it tough to top Rs 32,950 in the domestic market.
Looking at the global scenario, with escalating trade war, US-Iran geopolitical tensions, Brexit and slower global growth prospects, gold may attempt to stage a possible breakout of long-term resistance at $1,350. We expect the commodity to remain positive and test the $1,374-1,390 zone in the coming days.
Technical chart of gold
Gold prices have hit the $1,348 level after holding its crucial support of $1,266 on a closing basis. The metal had corrected from a high of $1,356 made in February.
At the MCX, prices have rebounded from the lows of Rs 31,232 to the highs of Rs 32,956.
Looking at the weekly charts, there is a possibility of long-term breakout above the $1,350 level, which may extend till the $1,360-$1,389 zone in the coming sessions. Read More – Source