Is gold ready to break through resistance?

Commodities 5 minutes to read

Steen Jakobsen

Chief Economist & CIO

Summary:  Is gold ready to take out key resistance at $1350-60/oz?


Action: Buy XAUUSD at $1,347.00/oz with a stop set to a daily close of $1,318/oz.

Why: The $1,350-60/oz level is a major technical resiatance point; Saxo Head of Commodity Strategy Ole Hansen sees the potential for $100 in upside if this is broken.

Background: The backdrop to gold price movements consists of the China-US trade war, increasing tensions around Iran, Federal Reserve easing, extensive gold buying by central banks, and technical factors.
XAU
Source: Bloomberg
The Fed is now seen as cutting four times by our freind at Nordea, @SvendsenAnders.
Fed forecast
On the geopolitical front, tensions are rising between the US and Iran.
Iran
CNBC reports that gold's sharp rally this month has come on expectations of a Fed rate cut.
Gold
Source: ThinkorSwim
Gold
Source: ThinkorSwim
Gold
Source: ThinkorSwim
Finally, Kitco is reporting that the People's Bank of China expanded its gold purchasing in May while Bloomberg points out that this represents six straight months of expansion.

Saxo Bank A/S - Representative Office
Boulevard Plaza - Tower 1
30th floor, office 3002
Dubai Downtown, Burj Khalifa area
Dubai
UAE

UAE

Trade responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.