In the early morning trade, August gold is currently up big at $1,303 an ounce extending its two-day rally largely due to President Trump’s evening comments which state, “On June 10th, the United States will impose a 5% Tariff on all goods coming into our country from Mexico, until such time as illegal migrants coming through Mexico, and into our country, STOP. The Tariff will gradually increase until the illegal immigration problem is remedied”. This tweet has created fresh new tensions between U.S. and Mexico relations. Furthermore, after the US Border Patrol agents apprehended the largest group of illegal immigrants ever, consisting of 1,036 at the EL Paso border crossing around 4:00 AM this morning, I would take this President at his word as he is in his right to protect the sovereignty of a free nation, so this situation could keep gold above $1,300 an ounce. Other geopolitical news that could keep the gold rally going also is the escalating U.S./Russian tensions over nuclear testing activities and election meddling.
For the bulls, let’s keep the technical as simple as possible, below I highlighted on my August daily gold chart the May high of $1,310. August gold is currently trading at $1,303, so if the shiny one can close above this level today or next week, then it has a likely chance of rallying all the way up to its yearly high of $1,361 a troy ounce. Furthermore, you can see if it closes above this level I mentioned above, then you can see by analyzing the chart that gold will be back above all its down trends and start a fresh new strong bull rally back by many geopolitical tensions.
Gold Aug ’19 Daily Chart