Gold Extends Upside Rally On China Optimism


Gold extended upside movement on Friday following the industrial production report from China. The precious metal is approaching a key resistance level that might result in temporary retracement. The long term sentiment however remains extremely bullish due to Higher High and Higher low on higher timeframes.

Technical Analysis

As of this writing, the precious metal is being traded near $1273 an ounce. A support can be noted around $1262, the 61.8% fib level ahead of $1231, the 76.4% fib level as demonstrated in the following chart. A break and daily closing below the $1231 support area could spur a deeper correction towards the double bottom support around $1180.


On the upside, the metal is likely to face a hurdle near $1287, the 50% fib level and 55 Simple Moving Average (SMA) ahead of $1312, the 38.2% fib level and then $1392 which is the swing high of the last major rally.

China Industrial Production

The industrial production increased in China to 8.8% during May as compared to 8.7% in the same month of the year before, a government report revealed today. Analysts had also predicted 8.8% industrial production in May, thus the actual outcome came out exactly in line with the expectations.

US Monetary Policy Outlook

The US Central Bank is expected to continue its aggressive policy by trimming the monthly asset purchase program in the forthcoming Federal Open Market Committee (FOMC) meetings. The tapering decision spurs bullish momentum in the US Dollar (USD) which consequently increases the selling pressure in gold and other precious metals.

Trade Ideas

 Considering the overall macro-economic outlook and technical analysis, buying the precious metal on dips appears to be a good strategy, the stop may be placed at $1240 which is the low of the recent correction phase. 

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: Dollar Falls from 10-month High Market Analysis: US Currency Continues to Grow Ahead of GDP Data Release Market Analysis: Gold and Commodity Currencies Resume Their Decline Market Analysis: EUR/USD Takes Hit While USD/CHF Surges Market Analysis: The Yen and European Currencies Headed to New Lows

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: Inflation, EUR/USD, S&P 500, OIL

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. Inflation Still Dogs the

Forex Analysis

Market Analysis: Dollar Falls from 10-month High

EUR/USDThe euro rose on Thursday as the dollar retreated since investors remained cautious ahead of key inflation figures due on Friday. Data on Thursday showed the US economy maintained fairly strong growth in Q2, with an unrevised annual rate


US 30 Analysis: Dow Jones Finds Support

September is likely to be the second month in a row that the Dow Jones (US 30) stock market index declined. The last time this happened was... also in September, a year ago. Important economic data was published yesterday: → According

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.