Gold bears keep the market below the $1,350 resistance as risk appetite returns

• Risk-on is back with stocks higher, lower yen and a steady US Dollar.
• Gold reverses down sharply off the 1,348.40 resistance.

Gold is trading at about $1,334.40 up 0.15%  as the European forex session is coming to an end on Wednesday. Earlier in the day, the yellow metal rose as high as $1,348.40 to a one-week high as fears about a trade war escalated between China and the United States. In a response to Trump’s tariffs on steel and aluminum, China decided to slap a 25% trade tariffs on various US goods including cars, aircraft, and soybeans. 

However, the risk-off is slowly abating and gold sharply reversed down from the daily high,  now trading back in the $1,330 region. Stocks´ investors are confident as the three main indices in Wall Street are rebounding off their lows and the yen is being sold across the board. The yen is usually bought as a safe-haven in times of stock market fears. The US Dollar Index is seen steady trading close to the $90 level.

Gold weekly chart

Gold is trading inside last week’s range and is currently retreating from the 1,350 key level. Key support is seen at $1,321 last week’s low. 

Gold Daily chart

Bears will need to break the $1,330 level with the 50 and 100-period simple moving average. Unless the bulls can retake the $1,400 level the short-term momentum is currently seen as bearish. 

Gold 4-hour chart

Resistance is seen at the $1,340 psychological level and at $1,348.40 swing high, while support is seen at $1,328.60 swing low and confluence zone, followed by $1,321.06 swing low.