Tag: Support and Resisntace

On Friday, the precious metal is trading a bit calm after exhibiting dramatic movement, placing a high of around 1,484 to a low of 1,462. Despite weaker than expected macroeconomic data from the United States, the U.S. dollar remained a bit strong on Thursday as the trade optimism increased.  

The U.S. President Donald Trump tweeted on Thursday that “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”. Which raised the hopes for completion of the phase-one trade deal sooner, and riskier assets gained traction.

Besides, another positive gesture by the United States was an offer made to China as part of a phase one deal. The U.S. negotiators offered to cut the existing tariffs and not to impose the latest round of tariffs in exchange for U.S. agricultural purchases from China and better intellectual property rights.

They offered to decrease existing tariffs by half in return for large U.S. agricultural purchases from China. So far, China has not responded but has argued that binding in a written agreement for investments would be against WTO rules and would also harm Chinese companies.

Gold – XAU/USD – Daily Technical Levels

Support     Resistance 

1,460.28     1,483.1

1,450.74     1,496.37

1,427.92     1,519.18

Pivot Point 1,473.55

Technically, gold has formed an ascending triangle pattern, which is keeping the XAU/USD supported over 1,462 level. A bearish breakout of this can trigger further selling until 1,455, but that significant movement isn’t expected on the U.S. retail sales until and unless we see a dramatic deviation in figures. 

On the higher side, 1,480 is likely to be the next resistance area for gold. So we can play within this limited range, selling at the top and buying at the bottom. Good luck! 

On Wednesday, the price of the precious metal gold moved in a tight range as cautious traders back out from big bets before of U.S. Federal Reserve’s monetary policy statement following in the day and amid an imminent tariff deadline.

The Small Business Index from the U.S. National Federation of Independent Business (NIFB) was released. The report showed an increased figure in the month of November to 104.7 from the expected 103.1, which supported the greenback.

At 18:30 GMT, the Revised Non-Farm Productivity for the third quarter was released and came in as -0.2% against the expectations of -0.1%. The Revised Unit Labour Costs for the third quarter from the United States dropped to 2.5% from the expectations of 3.4%.

According to the analysis of Chinese & U.S. data, China has bought more U.S. soybeans between September and November this year, giving an excellent gesture to try to reach an initial agreement on trade. The Chinese imports of U.S. soybeans increased 13 times from the previous year’s same period.

However, Chinese officials are hopeful that the U.S. will delay a threatened tariff increase due on Sunday as both countries are focused on the de-escalation of trade tensions. Traders are keeping an eye on a specific move from China or the U.S. in the development of trade deal to react accordingly.

Investors are also waiting for the forecast of U.S. economic growth from policymakers who are attending a two-day meeting of Federal Reserve, which will end on Wednesday. Federal Reserve is expected to hold its interest rates unchanged in this meeting. On Wednesday, the Consumer Price Index from the United States will be released, which is expected to drop to 0.2% from the previous month’s 0.4%.

Gold – XAU/USD – Trade Plan

This week, the precious metal gold hasn’t exhibited major movements as most of the market awaited the U.S. CPI and FOMC figures. Gold is stuck in a tight trading range of 1,467 – 1,459.  

On the 4-hour timeframe, gold is forming neutral candles within the same range of 1,467 – 1,459, which is signaling a lull before the storm. Gold is also gaining support around 1,459, and it’s extended by a bullish trendline while the RSI and MACD stay around 50 and 0, respectively. 

Gold – XAU/USD – Daily Technical Levels

Support    Resistance 

1,459.88      1,469.07

1,455.37      1,473.74

1,446.19      1,482.92

Pivot Point 1464.56

A bearish breakout of 1,458 can lead to gold prices towards 1,452 level. Alternatively, the bullish breakout of 1,467 can lead it towards 1,471 and even higher. Looks like, traders are going to keep trading choppy session until the CPI and FOMC is released tomorrow. Good luck!