Gold prices are rising this week as concerns over the US-China trade relations fueled safe-haven demand in the global markets. On Wednesday, the bullion extended gains to mid-April highs marginally below the $1,290 handle and could make further bullish attempts if trade tensions continue to rise.
US-China trade talks will resume in Washington tomorrow. After the latest Trump’s threats, investor optimism on further progress in negotiations towards a deal has been waning. At the same time, it looks like the markets haven’t yet fully prices in the potential breakdown in talks without a deal. For the yellow metal, is means that the prices could see further gains in case of a negative scenario.
Technically, gold needs to break above the 100-DMA around $1,295 in order to target the $1,300 psychological level. Recovery above this resistance is needed to brighten the mid-term technical outlook for the precious metal. On the downside, the immediate support now comes at $1,280.