Global stocks bounce back, Gold shines through chaos

Financial Mirror (Cyprus) - - WORLD - By Luk­man Otu­nunga, Re­search An­a­lyst at FXTM

The bru­tal sell­off that en­gulfed global stocks this week took a pause on Fri­day as risk sen­ti­ment slightly i mproved across fi­nan­cial mar­kets.

Most Asian shares re­cov­ered dur­ing early trade de­spite Wall Street suf­fer­ing heavy losses overnight. In Europe, stocks con­tinue to march higher on pos­i­tive global cues which could sup­port Wall Street later in the af­ter­noon.

Although pos­i­tive trade data from China and re­ports of U.S. Pres­i­dent Don­ald Trump meet­ing Chi­nese Pres­i­dent Xi Jin­ping at the G20 sum­mit next month has rekin­dled risk ap­petite, stock mar­kets are not out of the woods yet.

Con­cerns re­volv­ing around es­ca­lat­ing trade ten­sions, prospects of ris­ing in­ter­est rates and global growth con­cerns re­main a drag on global eq­uity mar­kets. With cau­tion likely to heighten ahead of the earn­ing’s sea­sons, the cur­rent stock mar­ket re­bound could prove to be a mere dead-cat bounce. driv­ing seat above the $1,213 level. While the tech­ni­cal out­look points to fur­ther up­side, fun­da­men­tals are still in the bear’s favour. With the Dol­lar sup­ported by safe-haven flows and prospects of higher U.S. in­ter­est, the medium- to longer-term out­look re­mains neg­a­tive for Gold.

Fo­cus­ing purely on the tech­ni­cal pic­ture, Gold prices turned bullish on the daily charts fol­low­ing a break­out above the $1,213 re­sis­tance level.

In­vestors may utiliSe $1,213 as a fresh sup­port to push prices to­wards $1228.20 and $1233.50. If prices un­able to keep above the $1,213, Gold has scope to de­pre­ci­ate back to­wards the $1,200 psy­cho­log­i­cal level.

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