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Gold’s Sideways Trading Continues as Traders Await US GDP

Posted Wednesday, November 27, 2019 by
Arslan Butt • 2 min read

Gold prices closed at $1416.350 after placing a high of $1462.90 and a low of $1450.00. Overall the trend for gold remained bullish that day. At 18:30 GMT, the goods trade balance for the month of October from the United States came in at -66.5B against the expectations of -71.3B and supported US tollar. The prelim wholesale inventories came in flat with expectations of 0.2%.

At 19:00 GMT, the Housing Price Index (HPI) showed growth to 0.6% from the expected 0.5% and supported the US dollar. The S&P/CS Composite-20 HPI remained flat with expectations of 2.1%.

At 19:59 GMT, the Richmond Manufacturing Index from the United States decreased to -1 from the expectations of 6 and did not support the US dollar. The closely watched CB Consumer Confidence at 20:00 GMT also came in against the US dollar when it was decreased to 125.5 against the expectations of 126.9.

However, at 20:00 GMT, the new home sales from the United States showed growth to 733K in comparison of expected 708K and supported US dollar.

The drop in Consumer Confidence weighed heavily on US Dollar as it was the highlighted macroeconomic data on Tuesday. The decreased CB Consumer confidence weighed on the US dollar and had a reverse reaction on yellow metal prices. As a result, the bullish trend for gold started after dropping for four consecutive days.

On the trade war front, there were reports that Chinese Vice President Liu He held talks over the phone again with US Trade Representative and Treasury Secretary on the topic of the Phase-one deal agreement.
It has been seen that each time these three officials spoke in the past month, the hopes in the market for completing phase-one deal emerged, only to realize that the expectations were wrong.

On Tuesday, Gold’s role as a safe-haven hedge against the trade war was seen after the latest round of trade talks, but the upward trend was within limits due to uncertain result hopes.

Being a holiday week in the United States, the market is showing to remain neutral with the ongoing trade talks as they are somewhat optimistic, but they are also reticent. So gold is waiting for some big headline to set its direction in one way.

GOLD – XAU/USD – Technical Outlook

Gold’s choppy trend seems over as it has violated the double bottom support level of 1,456, which opens further room for selling until 1,449. The client’s positions are long, so it’s going in our favor. It looks like it’s about to form a hammer on the 4-hour chart around 1,452 area, and if that happens, we may see a slight bullish reversal around this level until 1,457.