Good morning, fellas.

The economic calendar is a bit light today, and traders may price in better than expected Non-farm payroll figures from the US. In that case, gold can stay under pressure today.

On Friday, the precious metal GOLD prices closed at $1479.440 after placing a high of $1479.800 and a low of $1471.390. Overall the movement for gold remained bullish.

At 18:30 GMT, the average hourly earnings from the United States Bureau of Labor Statistics was published, which showed a decline in November to 0.2% from the expectations of 0.3% and weighed on the US dollar.

The non-farm employment change for November showed growth to 266K from expected 181K and supported the US dollar. The unemployment rate of the United States also declined in the month of November to 3.5% from previous & expected 3.6% and added in support of the US dollar.

At 20:00 GMT, the prelim consumer sentiment from the University of Michigan also came in favor of the US dollar at 99.2 against the expectations of 97.0. The final wholesale inventories for the month of October were also in favor of the greenback at 0.1% against the expectation of 0.2%.

The prelim inflation expectations from the University of Michigan showed a drop this month to 2.4% from the previous 2.5%.

Overall the macroeconomic data from the United States was supportive of the US dollar on Friday but did not help drop the yellow metal prices. Gold prices fell to near $1471 on the back of robust US data but managed to end the trading day with a bullish candle. Stronger than expected job numbers in the month of November supported the US dollar and put pressure on gold prices on the ending day of the week.

On the news front, the top White House economic adviser Larry Kudlow on Friday said that a partial trade pact with China was close at hand. His statement like this ahead of another round of US tariffs increased the hopes for completion of the phase-one trade deal.

Larry said that there was no arbitrary deadline for trade deal, but December 15 remained an important date concerning tariffs. He added that both parties were close to agreeing on the interim trade deal as they were conducting constructive talks daily.

According to Kudlow, President Trump liked the situation of current trade talks but was not ready to sign any deal with China. Meanwhile, China, in an attempt to inject some momentum into the ongoing talks, announced to exempt some US soybeans and pork imports from tariffs. China had imposed 25% tariffs on US soybeans and pork in July 2018 after the US slapped punitive duties on Chinese goods.

The Ministry of Commerce spokesman Gao Feng said on Thursday that if both sides agreed on the phase-one deal, then tariffs should be reduced accordingly.

On the other hand, US President Donald Trump called for World Bank to stop loaning money to China on Friday. The World Bank on Thursday adopted a plan to aid China with $1-1.5 billion in low-interest loans annually through June 2025.

World Bank’s action to lend money to China despite Washington’s objection was disturbing for President Trump as he argued that Beijing was too wealthy for international aid. He wrote in a post on Twitter that “Why is the World Bank loaning money to China? Can this be possible China has plenty of money, and if they don’t, they create it? STOP!”.

Mixed statements from US & China sides related to trade deal and continuous interference by Washington in China’s affairs raised uncertainty in the market. Hence, gold prices started to move upward and ended with a bullish candle on Friday.

Daily Technical Levels

Support Resistance

1478.84 1486.54

1474.57 1489.97

1471.14 1494.24

Pivot Point: 1482.27

Gold – XAU/USD – Trade Plan

The US NFP figures came out better than expected and drove sharp sell-off in the market. For the moment, gold is trading at 1,460 levels, having formed an inverted hammer pattern, which is followed by a strong bearish trend.

Typically such patterns drive bullish reversals in the market. But at the same time, if we notice Friday’s closing candle, it’s exhibiting robust bearish bias.

If gold continues to trade bullish above 1,458 support, the odds of 23/6% Fibo retracement and 38.2% retracement at 1,463 and 1,466 remain pretty high. Alternatively, the violation of the 1,457 level can extend sell-off until 1,453 support level.

Good luck!