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Gold - 4 Hours Chart

Daily Brief, Oct 25 – Everything You Need to Know to Trade Gold Today

Posted Friday, October 25, 2019 by
Arslan Butt • 2 min read

Happy Friday, traders.

The market seems to trade technical setups due to the lack of top-tier economic events. The only economic event that can drive some volatility in the market today is the German Ifo Business Climate.

German Ifo Business Climate – The Ifo Institute for Economic Research is due to report German Ifo Business Climate figures. This survey is highly respected due to its large sample size and historical correlation with German and broader Eurozone economic conditions. It tends to create a strong market impact upon release. Source changed series from the base year of 2000 to the base year of 2005, as of May 2011, and changed series to include services, as of April 2018. Economists are expecting 94.5 vs. 94.6 beforehand. The data may go muted unless there is a significant deviation.

Gold prices opened at $1491.44 and have placed a high of $1503.990 and low of $1487.96 until now. The overall movement for gold remained bullish on Thursday, and gold is currently trading at $1502.750.

Gold prices jumped back above $1500 on Thursday due to weak economic data from Europe and Japan. The weaker PMI from Japan and Europe indicated the need for more monetary stimulus.

In Japan, manufacturing activities fell at the fastest rate in three years, and as for Eurozone, manufacturing activities stayed rather stagnant. However, the US PMI challenged the expectations for the decline and rose instead for the month of September. But the rise in US PMI could not stop the upward motion of Gold prices on Thursday.

During the period of year-long global slowdown, the manufacturing weakness has been mostly priced in. On the Brexit front, the European bonds also got support from unconfirmed news that the UK government will go for a general election to push the Brexit agenda rather than processing its withdrawal bill.

At 17:30 GMT, the core durable goods for September came in at -0.3% against the expectations of -0.2%. The durable goods orders came -1.1% against the expectations of -0.5%. The unemployment claims for this week from the United States came in less than expected at 212K vs. 216K.

At 18:45 GMT, the Flash Manufacturing PMI of the United States grew to 51.5, which was expected at 50.7. The Flash Services PMI came in as expected at 51.0. However, the new home sales for September showed a decline to 701K from 710K expectations.

Overall, the economic data of the USA was in support of the US dollar on Thursday. But Gold prices moved against the trend of negative correlation with US dollar and moved in the same direction.

Gold - 4 Hours Chart
Gold – 4 Hours Chart

GOLD – XAU/USD – Daily Levels
Support Resistance
1493.22 1509.43
1482.53 1514.95
1466.32 1531.16
Key Trading Level: 1498.74

Gold – XAU/USD – Forex Trading Signal
Recalling the previous forecast, gold traded the asymmetric triangle pattern, which was extending resistance at 1,496 area. The triangle pattern has already been violated, and this opens up further room for buying until 1,508. On the lower side, gold may remain supported above 1,497 area.

Good luck!

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