However, with the failure to cross significant prices resistances, the question would be how much room on the upside does the bullion really have?
Gold prices have seen a mixed Q2 thus far with an upswing towards $1300 mid-April from geopolitical concerns before sinking to $1220 in early May. Pre-French election jitters coupled with risks of unrest in the Korean and Syrian regions have triggered the piling into the precious metal. However, the subsequently emergence of the expected result, the victory of Emmanuel Macron in the French election, and the dissipating geopolitical concerns saw a reversal for gold prices in a significant manner.
Amid geopolitical developments, the drop in USD had been a primary push for bullion. Gold was seen rallying from the $1215.95 low in early May with US dollar decline being a primary driver. Post the non-farm payrolls data, the set of indicators coming through for April had not been particularly impressive for the US. The latest investigation into Trump-Russia ties further adds a layer of gloss to the safe haven asset as jitters set into the market with regards to the delay the investigations could bring to policy developments.
Amid a larger symmetrical triangle pattern, gold prices appear to be consolidating between the support and resistance at 1217.66 and 1293.63 respectively. Longer term outlook for gold may remain intact as one towards the downside. This has been underpinned by an expected rise in global interest rates led by the US Federal Reserve. In line with the elevation in 10-year US treasury yields, gold prices may be subdued in the longer term.
The short-term outlook currently suggests otherwise. The Trump-Russia probe may have overshadowed the focus on North Korea at this moment, but unlike the French election, the clearance of both event risks does not come with a foreseeable pivot point. The implication for gold prices may be supported in the near term while any spike in risks coming from both events may trigger a break on the upside of the triangle resistance towards the $1300 figure. Watch for event risks ahead including a potential testimony by former FBI director James Comey and OPEC meeting next Wednesday and Thursday.