Gold prices ended Monday’s session down $4.44 an ounce, weighed down by a strong dollar. The U.S. dollar index rose on reports that the United States is preparing tariffs on additional Chinese goods if talks between presidents Donald Trump and Xi Jinping fail to reconcile the ongoing trade dispute. Global stock markets were mixed yesterday, with European stock indexes mostly firmer and Asian indexes mostly weaker. U.S. stock indexes slipped again Monday, extending last week’s decline.
Some profit-taking pressure was featured after XAU/USD failed to breach a key resistance in the 1240/35 area. Consequently, the market pulled back to the anticipated support at 1225. If this support is broken, the market will be targeting 1220.50-1219.50, the bottom of the 4-hourly cloud. Breaking below 1219.50 opens up the risk of a drop to 1213/1.
To the upside, the initial resistance sits in the 1235.50-1233 area occupied by the hourly Ichimoku cloud. A break through there could lead to a retest of the 1240 level. The bulls have to produce a daily close above 1240 to tackle the next barrier in the 1252/48 zone.