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Morning Brief, Jan 21 – Everything you Need to Know About Gold Today

On Monday, the market volatility is likely to remain thin as the financial markets will remain closed in the wake of Holiday in the United States. The US banks will be closed in observance of Martin Luther King Day. In case you are wondering how this is going to impact the market volatility, let me explain it to you.

The Banks facilitate the majority of foreign exchange volume. When they are closed, the market is less liquid and speculators become a more dominant market influence. This can lead to both abnormally low and abnormally high volatility.

Gold – XAU/USD – Fundamental Outlook

Speaking about the dollar, the index held steady near a two-week high on Monday. The market is trading with the risk-on sentiment despite the latest data showing China’s 2018 economic extension slowing to a near three-decade low.

China is the second biggest consumer of gold and it does place heavy impact on its valuation. A drop in Chinese economic events is triggering the bearish sentiment for gold. For sure, an economy suffering a slowdown won’t care to store precious metals.

Besides that, gold prices are a bit supported on expectations that the US Federal Reserve will pause its interest rate hike cycle in 2019.

GOLD – XAU/USD –  Technical Outlook

On Friday, we had a bearish breakout in gold which triggered a sharp sell-off in gold. Breakout happened in the long-held technical range of $1,294–$1,287, leading gold prices towards $1,282.

On the daily time-frame, gold has formed a bearish engulfing pattern which is signaling a strong bearish trend in gold. The 50-periods moving average stands around $1,252 which means gold has a potential to continue bearish momentum.

Support   Resistance
1277.51     1289.15
1273.28    1296.56
1261.64     1308.2
Key Trading Level: 1284.92

Fellas, the bearish engulfing pattern on the daily time-frame can be a threat to bulls, so we will prefer taking sell-positions below $1,284 with a target of $1,277 today.

Good luck!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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