GOLD: Corrective Pullback On Tariff Optimism, But Technical Uptrend Dominant

The pullback in spot gold from yesterday’s $3,500.1 all time high has extended to ~6.3%, with the WSJ’s latest article on possible Chinese tariff rollbacks providing the latest source of pressure. Gold is down 3% on the session, currently at ~$3,280.

• The pullback has allowed an overbought condition to unwind, with gold piercing initial support at the April 17 low of $3284.0/oz. Firm support is seen at the 20-day EMA of $3184.2. Shallower selloffs will be considered corrective at this stage.
• A dominant uptrend remains intact, with moving average studies firmly in a bull-mode setup. Resistance levels to flag are:
  • RES 1: $3500.1 - High Apr 22   
  • RES 2: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
  • RES 3: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
• Heightened policy uncertainty, risk-off dynamics and some questions around the integrity of the US dollar/USTs as reserve assets have proved supportive of gold since the turn of the year.
• With US tariffs expected to prove stagflationary in the short (and potentially medium) term, and policy volatility likely to remain throughout this US administration’s term, these tailwinds look set to remain in place