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  • Gold  rose from $1,272.91oz to a high of $1,287.30oz overnight, ending the NY session around $1,284oz.
  • Trade risks intensify among investor sentiment.

An intensifying US-China trade dispute presents a potential downside risk for commodities but gold could continue to shine on. It was a  risk-off session overnight that made for  sharp losses in the U.S. benchmarks as follows, and gold attracted a safe haven bid as investors seek protection from the losses in other asset classes and  rose from $1,272.91oz to a high of $1,287.30oz overnight, ending the NY session around $1,284oz:

The S&P 500 down 1.2% to end around 2,822.
The tech-heavy Nasdaq Composite dropped 1.6% to end near 7,628.
The Dow Jones Industrial Average (DJIA), -1.11% lost 286 points, or 1.1%, to end around 25,490.

The US 10yr treasury yield also fell from 2.38% to 2.29% (the lowest since Oct 2017), steadying at 2.32% which helped gold to correct from recent lows.

“China is prepared to hunker down and support its private enterprises rather than yield to the financial pressures being applied by the US. As both sides will only negotiate on their own terms, it could be years before the two powers can find sufficient common ground. Nomura is pricing in a 65% probability of the US imposing tariffs on all Chinese goods before year-end,” analysts at ANZ explained.  

Gold levels

Gold prices have held at the long term support line taking on the 20-D EMA on Thursday en route towards channel resistance with RSI turning up from the daily resistance as well. That mid-August 2018 major-uptrend’s support line seems sold enough for bulls to rely upon ahead of the double bottom lows at 1266 as a cushion in case of another test of the downside.  However, a break of this support will open 1262 and S1. The 200 DMA is located at 1257 while 1251 marks the 10th Dec swing highs (William’s fractal point and target). On the flipside, a mean reversion of the recent swing highs to lows has taken place 1286.50 and bulls can target the 61.8% at 1290 ahead of 1297 as the trend line resistance. 1303 is recent swing fractal high.