XAUUSD stalling near $1510.00 after the pair made recent strong gains to 6 year high with the rally being driven primarily by a plunge in Global Bond Yields. Additionally the pair was fueled by a surprise 50-basis point rate cut by the Reserve Bank of New Zealand earlier in the day.The pair showed a drop after hitting $1500.00 as the global stock markets recovered on a stronger-than-expected Chinese yuan daily fixing level in today’s early sessions. The Global Stock gained after the Bank of China set the Daily Reference rate to 7/Dollar today.
In weekly time frame, the yellow metal broke the strong barrier near $1430.00 last week and have already reached the next upside target at $1500.00. If the stocks continues to push higher, then this should underpin rates and pressure gold. If stocks were to take another steep dive then flight-to-safety buying will drive yields lower, boosting demand for gold.
The daily time frames shows the pair’s short term retracement inside the raising channel which is eyed for a potential pullback for a better opportunity to have a bullish bias. The gold is expected to remain in bullish as the Federal Reserve continues to ease policy, while the trade war tensions weigh on economic performance. Once the channel resistance is broken the upside target will be the strong support at 1560.00