Gold Jumps to Highs Since April 2018 as China Gets Hurt by Trade War

Gold rallies for the third day and it is ready to close an important week of gains above the 1,350 area.
Mauricio Carrillo
Gold Jumps to Highs Since April 2016 as China Gets Hurt by Trade War
Gold Jumps to Highs Since April 2016 as China Gets Hurt by Trade War

Gold and other precious metals are trading with a firm note on Friday as investors are digesting concerns on global economic growth and political uncertainties.

China and the United States are reporting economic data that shows both countries are taking a growing toll amid the trade war between the two superpowers. Also, geopolitical tensions in the Middle East are fueling risk aversion too.

Also, risk aversion means traders will look for safe havens such as gold and other metals.

Precious metals report for June 14

XAU/USD jumped to highs since April 2018 as the pair finally broke above the 1,345 level and extending gains for the third day to 1,360. Gold is closing its fourth week of gains.

Silver broke above the 200-day moving average at 14.90 on Friday, and it rallied for the fourth day in a row to test the 15.10 area. However, it remains inside the channel it has been trading since April.

Prices of silver recovered from initial declines on the week as XAG/USD bounced from 14.65 on Monday to attempt a close above the 50-week moving average at 15.02.

Copper remains contained by the 20-day moving average and it is posting losses on Friday as the unit is down 0.60% to 2.6370. The 2.600 area is still supporting the mineral.

On the week, copper is closing the week with gains; however, the unit has lost almost all previous benefits after it got a rejection at 2.7010 earlier in the week. XCU/USD remains contained by the 200-week moving average at 2.6174.

Palladium keeps its bullish tone on Friday with the metal advancing for the seventh day in a row. XPD/USD is trading at highs since March 27 at 1,467.40. Technical conditions are favoring more upside room, but be aware of the week-end profit taking and rebalancing.

On the week, Palladium has performed significant gains with the unit breaking above 1,380 area earlier this week and extending gains to 1,460.

Platinum is posting gains on Friday, but the unit remains to trade sideways below 820.00 and above the 20-day moving average level of 807.40.Technical studies signal for more gains in the short term. The weekly chart is showing limited gains for now.

China industrial production grows less in 17 years

Economic data in China is showing signs that the Asian superpower is getting hurt amid the trade war.

Industrial production in China grew 5% between May 2018 and 2019, its slowest pace since 2002, and below the improvement from 5.4% to 5.5% expected by market.

Besides, retail sales advanced 8.6% YoY in May, more than the 8.1% expected by the market and an acceleration from the 7.2% yearly increase performed in April.

Experts are taking economic news in China as a signal that both countries will have problems with its growth in the months to come. Eventually, it would drive global economies into recession.

Gold accelerates to highs since 2018 and set to close another green week

XAUUSD daily chart June 14

Gold is trading positive for the fourth day on Friday as investors are betting on safe havens such as the metal. With today’s advance, XAU/USD is ready to close a great week with a technical break above the 1,346 area.

Currently, XAU/USD is trading 1.0% positive on the day at 1,355. Previously, the metal jumped from 1,340 to break above the 1,350 area and tests highs since April 11, 2018.

Gold is confirming, thus, a signal built early in the week with a previous rejection of the 1,345 area and then a setback to 1,320 where the metal started another run with a new bullish leg.

After breaking 1,346 level and extending gains above 1,350, next resistances are at 1,360 and 1,366 double top. More to come.

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