Tuesday session was a remarkably positive day for gold market. Gold received support from a number of key fundamental factors amid reversal technical picture. First, metal received some support amid geopolitical factors. The sharp gain in price was triggered after reports that Tramp had canceled meeting of the two leaders –US and DPRK. US president decision has sharply increased the demand for defensive assets, the main of which is gold.
Further the negative dynamics of USD dollar amid lower yield of government bonds provided additional pressure for the gold market. And finally the technical picture suggested that the market had made up its mind to move in the north direction. It was evident by the emerging consolidation channel and candlestick patter – reversal hammer.
Today, the situation has changed somewhat. The yield of 10-year government bonds is growing again, like the US dollar, so gold begins to experience difficulties while maintaining the upward momentum. The news about the cancellation of the summit in Singapore is priced in the current levels and no longer has much support for gold.
Today the precious metal can resume its downward movement. At lest traders might fix previous proffer before weekend. We see how the situation will develop.
Among the important news, that can affect the trading is to highlight the speech of FED chief, Jerome Powell. If the FED official speaks on the future plans of the regulator for monetary policy, the market reaction can be quite significant.