At the highs earlier today, gold touched its strongest levels since May 2013

Gold D1 20-06

Gold is up by 1.4% on the day close to $1,380 but earlier today, bullion made highs of ~$1,395 as it touched levels last seen in May 2013. The breakout in gold is something that will be of major interest to markets over the coming days/weeks - more than it has since the climb during the end of May.

With the Fed losing its 'patience' stance and suggesting potential rate cuts, the dollar has been hammered and gold is continuing to reap the rewards from a weaker greenback but also as yields fall amid a growing chorus of more dovish central banks around the globe.

Right now, price is looking to hold a break above the 2016 high of $1,375.28 and will be aiming to clear daily resistance from the 2014 high at $1,392.33. These will be key levels to watch out for over the coming days for gold.

Following which, the bigger level of the $1,400 handle will be a key area that buyers have to get above in order to extend the breakout.

Right now, global trade developments are the biggest risk for central banks and also for market sentiment in general. As such, the next big risk event for markets and gold will be next week's G20 summit where we should see Trump and Xi meet up to discuss on trade relations between the two countries.

If US-China trade talks fail to get back on the right path, it will lay the groundwork for central banks to stay dovish and the pessimism will also benefit gold two-folds in this scenario.