For a number of mixed reasons, the greenback is taking up the bid. Despite the accommodative stance by the Fed and yesterday’s dovish shift in rate hike expectations, gold is under pressure.
“While the US central bank killed the dream of an additional rate hike in 2019, signalling a “perma-pause”, the reality is the market believes that the next move may very well be a cut. CTAs are set to turn become substantial buyers above $1315/oz, and given that the economy may be slowing, we remain comfortable with our eventual $1,400+ target for the yellow metal, as we expect data to continue deteriorating,” analysts at TD Securities explained.
The precious metal previously picked up a bid earlier when President Trump said he would keep tariffs on China even after a trade agreement had been reached to make sure the country is adhering to the terms of any trade deal.
To the downside, 1302 is key ahead of 1298, 1290 while 1280 is a keen target. Below there, 1275 remains the line in the sand to the downside, and a break below it will put the attention back to the towards to 1250, a key confluence area made up of Fibos and prior support and resistance. On the next leg up,however, 1332 guards the 2019 highs as being the 19th Feb high of 1345.19.