On Tuesday, gold has retained an upward trend movement, due to the increased interest of investors to the risk-free asset.
Major stock indexes finished trading on Tuesday in the red zone after Trump confirmed its intention to impose trade tariffs on some European goods, totaling $ 11 billion. This is a response of the White House to subsidize EU by Airbus. Now investors are concerned that the next aggravation of relations in international trade could further harm the development of the world economy, which continues to slow down the pace of its growth. These fears were confirmed yesterday by the IMF. Organization lowered projections in terms of growth of global economy with 3.5% in January to 3.3%. The main reasons for such a decision Fund noted the difficult situation in the world trade and high political uncertainty in many countries.
The growth of geopolitical tensions and the uncertainty is always a strong supporting factor for gold, which is traditionally viewed by investors as a basic asset protection from the increased risks.
Today, the market situation has not changed significantly. Investors behave very cautiously, waiting for important events that will occur later. The focus today will be the ECB meeting and comments by Mario Draghi's monetary policy, the extraordinary EU summit, which will decide the fate of Brexit, and the publication of the last FOMC meeting minutes, which further control plans for the implementation of monetary policy were profoundly revised . Each of these events could have a very strong influence on the driving dynamics of world markets.
At the second attempt the gold could pass resistance at 1300.00, and to gain a foothold above it. This is a strong signal in favor of further development of the upward movement, the purpose for which will be the level of 1310.00. Considering the situation at a younger time intervals is to provide a strong intraday resistance at 1305.00. Break of this level will increase the probability of working off a script with the growth of quotations to 1310.00. But, in the case of rollback prices on the level of 1305.00 will be a priority option to retest 1300.00.
Levels of resistance: 1300.00, 1303.00, 1310.00;
Support levels: 1297.00, 1291.00, 1283.50.
The main scenario - correction to 1300.00 and the resumption of the upward movement. Alternative - the breakdown of local resistance 1305.00 and 1310.00 for further growth.
In the gold market dominated by the positive fundamental backdrop that makes more urgent the purchase of the instrument within the day. Potential entry points should look at the level of 1300.00
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Based on materials FortFS