Earlier, today Gold prices (XAUUSD) reached a new 2019 high of $1459.95 as global stock markets plummeted amid the threats of new US tariffs from September 1, and investors searched refuge in the yellow metal.
The price trend of XAUUSD has been bullish from the start of the year, and look to have its best year since 2011 as the price broke out from a multi-year consolidation range.
In the short-term, the price leaped higher as President Trump last week said that a 10% tariff would be introduced on the reminder of US-China imports. The new duties would apply to $300 billion imports.
Technically, the price recompleted an ascending triangle pattern on Thursday last week, and this opened up for a rally towards the pattern target level of $1486.38. The pattern target is derived by taking the difference between the upward sloping trendline of the pattern and the horizontal resistance level at $1439.10 and adding the difference to the horizontal level.
In the short-term, I will treat the trend as upwards as long as the price trades above the $1421 level which is a level just below the 61.8% correction level of the current bull leg from the August 1 low at $1399.
I suspect that traders will see a correction towards the 38.2% correction level as an opportunity to add to their bullish exposure with their targets set on the ascending pattern target at $1486. With the Federal Reserve reducing interest rates gold price will remain supported, and a quick de-escalation in the US-China trade wars will be need to upset the gold bulls.Don’t miss a beat! Follow us on Twitter.