Gold clocks three-day high on ‘haven’ demand

Increased risks of global trade wars during Trump Presidency is pushing the safe haven metal higher in Asia.

Gold is trading 0.90% higher around $1216/Oz levels as the Dollar index is down 0.33% at 100.77. Meanwhile, the 10-year treasury yield has shed three basis points.

The USD sell-off is gathering pace, pushing the metal higher due to lack of (policy) specifics in Trump’s inauguration speech. Moreover, Trump has not softened his stance on trade after entering the White House, which is forcing markets to seriously consider the possibility of a global trade war

The US data calendar is light; hence the metal remains at the mercy of the action in the treasury yields. Unwinding of the Trump trade could gather pace in European session on fears of a rise in protectionism.

Gold Technical Levels

A break above $1218.90 (Jan 17 high) would open the doors to $1230.07 (50% Fib of Trump rally). The next hurdle is seen at $1235 (100-DMA). On the other hand, the upward sloping 10-DMA level of $1202 is a strong support, given the metal rebounded from the moving average in the previous two trading days. A break below 10-DMA could yield a sell-off to $1196 (Thursday’s low), under which the losses could be extended to $1176 (50-DMA).