- The weak tone in the USD – gold’s biggest nemesis – is likely pushing gold higher.
- A sharp rise in India’s gold imports seems to have boosted bullish sentiment.
Gold is flashing green in Asia and is attempting a break above the psychological hurdle, possibly on the back of the losses in the US dollar.
The US dollar exchange rate, as represented by the dollar index (DXY), fell to a low of 94.90 earlier today, having dropped 0.64 percent yesterday. More importantly, the greenback risks falling below the head-and-shoulders neckline support of 94.53 on escalating US-China trade tensions.
Further, the yellow metal is likely taking heart from the rising demand from India, one of the biggest sources of demand for gold. The data released yesterday showed that India’s gold imports more than doubled in August to hit their highest level in 15 months.
As a result, the metal may remain well bid during the day ahead, although if the DXY picks up a bid on haven demand, then gold could trim gains. It is worth noting that in the recent past, the US dollar has strengthened during the bouts of risk aversion.
Gold Technical Levels
Resistance: $1,201 (10-day moving average), $1,204.59 (Aug. 3 low), $1,214.30 (Aug. 28 high)
Support: $1,196 (session low), $1,183 (Aug. 24 low), $1,160 (Aug. 16 low)
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