Gold is trading in narrow trading range today between 1,330 and 1,334 as investor expectations that the Fed will eventually cut interest rates in the face of escalating US-China trade war, grow. FED Chairman Powell earlier this week commented that the Fed is willing to take any action in the event of a slowdown. The bond market is indicating two 25bps cuts by December 2019 and a further cut in 2020. The Greenback feels the pressure and is trading around 97.
The precious metal momentum is bullish as it trades above all the major daily moving averages. Gold exit the overbought area yesterday as it retreated from the 1344 high. The immediate support for the yellow metal stands at yesterday’s low at $1,325 while more solid support can be found at the $1,306 where the 200 hour moving average crosses. On the upside first resistance would be met at today’s high at $1,335 while a break above can lead prices up to 1344 recent high. Even we are bullish on gold it would be wise to wait for the NFP data later today before entering any position.