On Wednesday, gold was trading most of the day in the green zone, due to the high demand for defensive assets, but with the beginning of the American session, the bulls lost all their advantage and trading ended at the opening level of the day. The pressure on the price was exerted by the US dollar, whose index for the day rose by almost 0.2%. The US currency began to actively strengthen after media reports about the possible restrictions on the export of rare earth metals, which are used for the production of smartphones, as a response to the previously introduced duty on imports of Chinese goods to the United States. In this situation, many investors have chosen the dollar, rather than gold, as protection against increased trading risks.
Today, the yellow metal continued its downward movement against the background of the recovery of the major stock indices. The pressure on the price continues from the US dollar, whose index is still trading in the green zone.
In addition to geopolitical news, economic data can have a very strong influence on trading today, since the United States will publish data from the second estimate of GDP for the first quarter of 2019. Experts expect the figure at 3.1%, after 3.2% according to the initial assessment. Also in the United States today will be published data on pending sales in the real estate market. There is a high probability that both reports will be at or above the predicted values, which will strengthen the position of the dollar and increase the pressure on the yellow metal.
On the chart we see that the price did not manage to overcome the resistance around the weekly highs yesterday and resumed its downward movement. Now the trades pass below the level of 1278.00, which makes the scenario with the further development of the downward movement towards the levels of 1273.00 and 1270.00 more relevant.
Resistance Levels: 1284.00, 1289.00, 1300.00;
Support levels: 1277.00, 1273.00, 1270.00.
The main scenario - a correction to 1282.00 and a decrease to 1273.00.
Alternative scenario - decline from current levels in the direction of the level of 1270.00.
Negative news background dominates the market locally. The bearish signals are also increasing on the chart, so for a short time we are looking for sales in the range between the levels of 1280.00-1282.50.