FxWirePro: Gold likely go for another test of resistance at $1380

Gold has formed a commendable support around $1300 area, and we stick to our previous call for the Gold to reach around $1420 while the support around $1300 holds. Though, the equity, and the bond markets have benefited from the fresh stimulus measures taken up by the Bank of England (BoE), better than expected economic outcome post Brexit referendum, and the scale back in expectations from the U.S. Federal reserve, underlying unease remains. And that should benefit gold at a time when some of the prominent indicators are pointing to an increased possibility of a U.S. recession.

Hence our call remains, however, gold may not get that lucky in its next run upwards and the rally may get halted around $1380 area once more. Even then it’s a good bet to long the gold as the Fed is widely expected to hold rates in September.

The gold is currently trading at $1334 per troy ounce.