FxWirePro: Gold on track to test $1500 resistance area

The yellow metal remains very well bid as it moves higher even as the USD remains strong. Below are the key fundamentals driving the yellow metal higher

• Recent actions and commentaries strongly suggests that the major global central banks (Federal Reserve, Bank of Canada, Bank of England, European Central Bank, Reserve Bank of India, People’s Bank of China, Reserve Bank of Australia, Reserve Bank of New Zealand) have either entered or entering a dovish cycle in monetary policies. Five of the eight above-mentioned banks have already started easing policy rates, while others are lined up to follow suit. Global monetary policy easing is extremely positive for the gold.
• Increased Geopolitical tensions thanks to Sino-American trade war, disputes in the Middle East - also remains as positive catalysts for the gold.
• Finally, central bank buying- Russia and China are heavily investing in gold in order to reduce reliance on USD.

Trade Idea:

• Since bottoming in February around 1160 area, the gold price is up 22 percent and currently trading at $1425 per troy ounce. The price is up more than 12 percent since May, about the time the Federal Reserve started signaling rate cuts.
• Calculations suggest that gold is on track to test key resistance around $1490-1507 area.