Will Gold Surge with a Gap Up as US-China Trade War Heats Up?XAU/USD Analysis: Will Gold Surge with a Gap Up? (26/5 - 30/5)
Fundamental Outlook
US-China Trade War: China's halt on US goods imports weakens the USD, boosting gold (inverse USD correlation).
Trump’s 50% EU Tariff Threat: Potential EU retaliation could spike global uncertainty, driving investors to gold as a safe haven.
Gold Demand: Rising trade tensions and inflation fears are pushing capital into gold, especially in India and China with upcoming festivals.
Macro Drivers
Monetary Policy:
US Fed: Trade war fallout may pressure rate cuts, reducing USD appeal and supporting gold.
China’s PBOC: Possible Yuan devaluation could lift gold prices in USD terms.
Market Sentiment:
Expect VIX spikes from trade uncertainties, favoring gold.
Strong physical gold demand in Asia supports prices.
Key Events:
US PCE inflation and consumer confidence data (watch for high inflation boosting gold).
Monitor EU/China trade retaliation statements.
Technical Analysis (H4 Chart)
Trend: Gold is in a strong ascending channel with support (3,325) and resistance (3,407 - 3,444).
Current Price: 3,407.554, testing key resistance (3,407 - 3,444).
Support Levels: 3,361.648 (mid-channel), 3,325.347 (channel support).
Resistance: 3,444.436 (all-time high).
Price Action: Recent Doji candle at resistance suggests possible pullback before continuation.
Fair Value Gaps (FVG):
3,325 - 3,340
3,361 - 3,407
Scenarios:
Bullish: Break above 3,444 with momentum could trigger a gap up, targeting 3,500
Bearish: Failure at 3,444 may lead to a pullback to 3,361 or 3,325.
Gap Up Probability: 60% chance at market open (26/5), driven by bullish sentiment.
Trading Plan
Buy Strategy
Entry: 3,361 - 3,370 (pullback to FVG or mid-channel).
Take Profit: 3,444 (resistance), 3,500 (breakout target).
Stop Loss: Below 3,325 (channel support).
Sell Strategy
Entry: Sell on rejection at 3,444 with bearish confirmation (e.g., strong bearish candle or head-and-shoulders).
Take Profit: 3,361 (FVG zone).
Stop Loss: Above 3,444.
Best Trading Times
Monitor market open (26/5) for gap-up confirmation.
Trade during London/New York sessions for optimal liquidity.
Key Takeaways
Gold is poised for potential upside due to trade war escalation and USD weakness. Watch for a breakout above 3,444 for a possible gap up or a pullback to 3,361 for buying opportunities. Stay updated on US inflation data and trade policy news.
