Gold leaps to fresh monthly highs amid weakening risk appetite
Despite the thinning trading volume in the NA session, gold was able to continue gathering strength against the USD, pushing the XAU/USD pair to its highest level since May 1 at $1269.55. As of writing, the pair was trading at $1268, up 1%, or $13, on the day.
The precious metal's safe-haven appeal seems to be the primary driving factor behind the pair's upsurge on Friday. After spending the whole week in a horizontal trading range, the pair finally made a decisive move as investors started to seek refuge in safer assets amid ongoing geopolitical uncertainties.
The latest headlines from the G7 meeting coupled with the concerns over the UK elections seems to be the impacting the market sentiment negatively. Earlier in the session, a White House advisor crossed the wires saying that President Donald Trump made it clear to the G7 that the United States will treat countries the same way they treat the U.S. regarding the international trade, reviving the concerns over Trump administration's protective policies. In the meantime, UK Prime Minister's Theresa May's decision to call for a snap election seems to be backfiring as her Conservatives continue to lose ground in the latest polls, potentially creating another political crisis in Europe.
- UK Election: Labour continues to close the gap against Conservatives
- UK PM May: G7 clear that Russia and Iran must push for Syria ceasefire
On the other hand, ahead of the long weekend, investors show no interest in stocks as the major equity indexes in the U.S. remain virtually unchanged on Friday, suggesting that the investors are staying away from riskier assets.
Technical levels to consider
The CCI on the daily graph has reached the 100 threshold, suggesting that the bullish momentum is becoming sustainable. Moreover, after breaking above the 50 level, the RSI on the same graph is gradually moving towards the 70 mark, further supporting the idea that the pair's rise is likely to continue. $1278 (Apr. 24 high) could be the initial hurdle for the pair ahead of $1283 (Aor. 20 high) and $1295 (apr. 16 high). On the downside, supports align at $1256 (50-DMA), $1250 (May 23 low) and $1241 (20-*DMA).