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  • On dollar strength, gold has turned sharply lower from the start of the week’s opening bid.
  • On the wider picture, gold has struggled in the middle of a trade spat between the US and China.

Gold has turned sharply lower from the start of the week’s opening bid, ($1,266.05 the high, en-route to the 21-D SMA at $1,269.19).  The move has come on the back of demand for the US dollar on Monday, strength across the board and between a range in the DXY of 93.7130-94.1880, currently +0.20% at 94.1510. Spot gold is currently oscillating around  $1,258 and has made a recent low of $1,254.78.  

Gold firmed at the start of the week in Asian and European markets even as stocks started out well. However, this was due to a retreat in the U.S. dollar, post nonfarm payrolls, which was helping to put the metal on track to notch its strongest level in roughly two weeks. There was a turn around in the dollar as NY got going, with the DXY bid up from 93.71 lows – (worth noting that the index has made gains in each of the last three months, while gold futures fell in April, May and June).

All eyes will turn to The North Atlantic Treaty Organization, (NATO)

On the wider picture, gold has struggled in the middle of a trade spat between the US and China where investors have been concerned that Beijing’s economy could be adversely hurt already showing signs of decelerating in recent months. Demand for gold has slowed perhaps in some parts down to China, as being one of the biggest buyers in metals, including gold. All eyes will turn to The North Atlantic Treaty Organization, (NATO), meeting coming up this week, whereby gold could catch a safe haven bid as we wait to see what Trump will come out with. However, for the meantime, the dollar is under demand on Central Bank divergences following the goldilocks nonfarm payrolls report and repositioning.  

Gold levels

Pressures remain to the downside with the golden death cross playing out, (the 50-D SMA moving average for gold prices is falling below its longer-term 200-D SMA moving average at 1,303).  The 10-D SMA comes at 1253 which guards a break to 1236/40 support guarding 1,213. On the flipside, key resistances above 1,243 look to be the 1,260 line, 1,268, 1,276 (Jun. 20 high) ahead of 1,269 (21-D SMA), 1282 and 1300 (psychological level).