Daily Brief, Nov 19: Everything You Need to Know About Gold
Arslan Butt • 2 min read
Gold prices closed at $1470.78 after placing a high of $1473.92 and a low of $1456.33. Overall the movement of Gold prices remained bullish. Earlier this month, gold fell from the $1,500 level after the Federal Reserve Chairman Jerome Powell made it clear that the third straight rate cut of quarter points by US Central Bank in October would be the last for this year.
Last week, gold fell due to the comments of Commerce Secretary Wilbur Ross and White House Chief Economic Adviser Larry Kudlow, who said that the United States and China were closing in on a deal. This created an impression on Friday that trade talks were headed in a constructive path. As a result, the gold prices fell on the ending day of last week.
On Monday, Gold was back on track after Beijing showed anxiety over the impeachment proceedings of US President Donald Trump. The CNBC cited a source in China that said that Beijing was reluctant to make any further concessions in trade talks in the near term. It also cited that Beijing would prefer to wait before making further talks and see the results of impeachment proceedings against Donald Trump.
If impeachment proceedings substantiate, then the odds for the phase-one deal of the US and China would reduce. The phase-one deal has repeatedly pushed back due to differences of both parties, which range from tariffs to intellectual property rights.
The US yields on Monday fell amid a weakened US dollar and gave a boost to Gold prices at the starting day of the week. On the data front, the NAHB Housing Market Index from the United States fell to 70 from forecast of 71 and weighed on US dollar at 20:00 GMT. This also gave an upward trend to the yellow metal prices and helped them end higher on Monday.
GOLD – XAU/USD – Technical Outlook
Gold soared dramatically after testing our second target level of 1,457 as fresh doubts about a trade deal between the United States and China dented appetite for riskier assets. On the 4-hour chart, gold has completed a 61.8% Fibonacci support level of 1,456, and then it bounced off sharply to place a high around 1,475 area. With this, gold has formed a double top pattern at 1,474.
Daily Technical Levels
Key Trading Level: 1467.29
At the moment, gold is holding below double top level and has closed bearish reversal patterns. Gold has already completed 23.6% Fibonacci retracement at 1,469 level, and below this, it can go after 1,467 area, which marks 28.2% Fibo level. In an extreme case, profit-taking by bulls can trigger sell-off until 1,462 level as the metal is already in a massively overbought zone.