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Gold prices soared in the international market over strengthening trade dispute of the United States with Mexico and China.
The Gold Spot rose from the level of US$ 1275.11 (Dayâs low on 30th May 2019) to the present high of US$ 1312.85 (as on 03rd June 2019 AEST 2:14 PM), which in turn, marked a third consecutive up rise for gold in the global market.
After the United States president Donald Trump mentioned that Washington would move forward to impose a tariff on Mexico if the illegal immigration problem is resolved across the border, Mexico pushed forward to secure a round of talks with the United States.
Mr Trump mentioned that the problem of illegal immigrants in the United States from Mexico exists for the past 25 years, and the United States wants actions and not talks. Further adding to his comments, Donald Trump also mentioned that if the problem is not resolved, the U.S. companies and jobs in Mexico would soon come back to the United States.
The recent tweet by the president jolted the market participants, and the market reacted quickly to hedge against the prevailing trade risks, which in turn, supported the gold prices.
Besides, the current tension between the United States, Syria and the Middle East is further adding to the gold rush.
On the other hand, the dollar prices lost further momentum, which added cushion to the gold. The dollar index fell from the level of 98.28 (Dayâs high on 30th May) to the present low of 97.58 (as on 03rd June 2019 AEST 2:58 PM).
The nose-dived dollar supported the Australian dollar, and the currency (AUD/USD) surged from the level of US$0.6899 (Dayâs low on 31st May) to the present high of US$0.6959 (as on 03rd June 2019 AEST 3:04 PM).
However, the rise in the Australian dollar least affected the gold prices in the domestic market, and the Australian gold prices behaved contrarian to its inverse relationship with the local currency and inched up in Australia.
The prices of Australian gold increased from the level of A$1838.79 (Dayâs low on 30th May) to the present high of A$1890.21 (as on 03rd June 2019 AEST 3:09 PM).
Gold on Charts:
Post giving a break out on an hourly chart; the gold prices rose significantly to the present level of approx. US$1312 (AEST 3:38 PM).
XAU Hourly Chart (Source: Thomson Reuters)
The prices are currently trading above its 7 and 20-days exponential moving averages, which are at US$1310.92 and US$1305.86 respectively.
The breakout on an hourly chart finally took the prices high enough to give a breakout on a daily chart as well.
XAU Daily Chart (Source: Thomson Reuters)
Upon carefully observing the daily chart, we can witness a breakout from the level of approx. US$1295, and the gold prices finally managed to cross the upper band of the Bollinger with 20-days simple moving average.
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