FxWirePro: Gold gives upside breakout; will it last?

The yellow metal in the bid,

The chart clearly shows that the bulls are enjoying a breakout at the moment. After last week’s failure to clear the down-trending line, gold is clearly in a buy breakout at the moment. President Trump has triggered the latest round of risk aversion by announcing 5 percent tariff on products from Mexico over border and immigration, “On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied.....at which time the Tariffs will be removed. Details from the White House to follow.”

Risk aversion is clearly the winner of the day as tariff friction gathers pace,

• Japanese stock index Nikkei 225 future down 2.45 percent.
• UK’s FTSE100 s down 1.1 percent.
• German DAX down 1.9 percent.
• U.S. S&P500 down 1.1 percent.
• WTI crude oil down 2.2 percent
• The Mexican peso is down 3.6 percent since the announcement.

Whereas safe-haven assets,

• Gold is up 0.51 percent.
• Yen is up 0.50 percent.

But with the rally last?

Our calculations at FxWirePro suggests that Gold is likely to move higher in the near term targeting $1305 area. It would find sellers starting $1308 per troy ounce. However, we do not see the gold price going beyond $1320 area and fall sharply.