Good morning, traders.

The economic calendar is a bit light today as most of the global markets and banks remain closed amid a national holiday. The US markets enjoy Columbus Day, Japanese markets enjoy Health-Sports Day, and Canada enjoys Thanksgiving Day.

Thus, the volatility is likely to thin on Monday due to a lack of economic events. However, the last week’s fundamentals may drive some price action in the market today.

During the previous week, the forex market traded the risk-on sentiment after the safe-haven demand faded on the US-China currency agreement.

The agreement on currency stability was being hovered as a symbol of improvement in this week’s trade discussions between the world’s two biggest economies. The safe-haven appeals waned after both nations came to a partial agreement during the weekend.

At the end of the week, gold closed trading at $1487.930 after placing a high of $1503.17 and a low of $1473.960. The overall trend remained bearish for gold prices on the ending day of the week.

Prelim UoM Consumer Sentiment

On Friday at 17:30 GMT, the import prices from the US Bureau of Statistics for the month of September came as 0.2% against -0.1% expected. At 19:00 GMT, the Prelim UoM Consumer Sentiment from the University of Michigan showed growth and came as 96.0 against 92.0 expectations. The inflation expectations of the United States came at 2.5% for this month.

US-China Trade Settlement

The robust macroeconomic data from the United States made the US Dollar stronger on Friday and put pressure on gold prices that day. After Sino-American trade talks on Friday, Donald Trump said that US & China had reached a “Phase 1 Deal.” The United States was due to raise tariffs on Chinese goods to 30% next week, but after the meeting between Trump and Chinese Vice Premier Liu He on Friday, the US agreed to suspend its next tariff hike on Chinese goods.

After this news, the chances for an agreement between US-China on ending the trade war enhances. Hence, the gold prices further dropped because of increased demand for the US Dollar and decreased demand for safe-haven assets on Friday.

Geopolitical Tensions – Kurdish Forces vs. Turkey

On Saturday, October 12, Trump defended his decision of US troop withdrawal from Northern Syria and said that our soldiers should not be there for the next 50 years, and the United States should prioritize the protection of its borders against others.

Turkey launched “operation Peace Spring” on October 9 to secure its borders against Kurdish forces. The operation was launched to aid the safe return of Syrian refugees and settle them in a 30km proposed safe-zone, which would be maintained after that the clearance of Kurdish forces.

The assault began when, on October 6, Trump gave permission to Tayyip Erdogan, Turkish President, in a phone call and agreed to remove US troops from there before the airstrike. The decision of troop withdrawal from the Syrian border was highly condemned at home and abroad as well. Gold prices have shown a bearish trend for last week due to US-China trade talks.

GOLD – XAU/USD – Technical Levels
Support Resistance
1469.75 1512.8
1450.39 1536.49
1407.34 1579.54
Key Trading Level: 1493.44

Last week, gold faced a hard time violating the triple top level of 1,511, and below this, it continued trading bearish until 1,474. On the way, gold also broke the double bottom support level of 1,489. For now, the same 1,489 level is likely to extend resistance for gold. Today, 1489 will be a crucial level to focus on.

Good luck!