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Daily Brief, Nov 28 – Trading Gold on Thanksgiving Holiday

Posted Thursday, November 28, 2019 by
Arslan Butt • 2 min read

Good morning, fellas.

The financial markets are exhibiting thin trading volume as most of the traders are staying out of the markets to enjoy Thanksgiving Holiday. We don’t have much on the economic calendar, so let’s see what’s going on in gold.

GOLD prices closed at $1453.9 after placing a high of $1461.75 and a low of $1452.47. Overall the trend for Gold remained bearish that day. Gold prices on Wednesday edged lower in a narrow range with robust US economic data ahead of US Thanksgiving Holiday on Thursday.

At 18:30 GMT, the core durable goods orders from the United States showed growth to 0.6% against the expectations of 0.2% and supported US dollar. The durable goods orders also supported the US dollar when it showed an increase to 0.6% from expected -0.5%.

The prelim gross domestic product (GDP) from the United States was increased to 2.1% from expected 1.9% and supported US dollar. The same was with the Prelim GDP Price Index, which came in at 1.8% against the expectations of 1.7%.

The US unemployment claims for this week also decreased to 213K from the expectations of 223K and supported its currency. At 19:45 GMT, the closely watched Chicago Purchasing Managers Index (PMI) was dropped to 46.3 from the expectations of 47.2. However, it was higher than the previous month’s 43.2.

At 20:00 GMT, the core PCE price index from the United States also dropped to 0.1% from expected 0.2% but was higher than the previous 0.0%. Personal spending from the United States remained flat at 0.3%.

The pending home sales for the month showed a drop to -1.7% from expected 0.2% and weighed on US dollar. The personal income for the month also dropped to 0.0% from expected 0.3%.

Apart from economic data, the riskier assets were also in demand in the market on Wednesday after the comment from President Donald Trump on Tuesday. He said that China and the United States were in “final throes” of trade negotiations on the phase-one deal, and it may take some of the heat out of the prevailing trade war.

This raised the selling pressure on yellow metal prices because of increased demand for riskier assets fueled by optimism over the US-China trade deal. US Treasury yields also rose on Wednesday and made US dollar more attractive and drove the need for dollar-denominated gold in a downward direction.

The positive comment from President Trump came after the trade negotiators from both countries held a telephonic conversation on how to resolve core issues of the Phase-one deal. Besides, the Chinese Ministry of Commerce confirmed after the conversation that both parties would remain in contact over the remaining problems of the phase-one agreement.

Gold – XAU/USD – Technical Levels

Support Resistance

1451.29 1458.99

1448.12 1463.52

1440.42 1471.22

Key Trading Level: 1455.82

Gold – XAU/USD – Trade Plan

Choppy trading in Gold continues as the precious metal still maintains the wide range of 1,464 – 1,452. Due to Thanksgiving holiday today, we may not see much moves in the market. We can try to cover above 1,452 as below this Gold can find next support around 1,447. The overall trend is likely to be mixed today.

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