Gold Sideways Trading Continues – Trade Plan for the Day

Posted Thursday, December 19, 2019 by
Arslan Butt • 2 min read

What’s up, traders.

Gold prices closed at $1475.450 after placing a high of $1479.27 and a low of $1470.42. Overall the movement of gold remained steady with a slightly bearish trend.

On Wednesday, gold dipped on a rising US dollar amid mounting expectations that Federal Reserve would not change its interest rates soon. On the back of strong macroeconomic data on Tuesday, the US dollar gained support. The data indicated that Federal Reserve would not need to cut interest rates soon.

Aiding in the downward trend of GOLD was the phase-one trade deal between the United States and China. The possible truce between the two largest economies of the world in terms of the trade war removed the urge to get into safe havens like gold and Yen.

In Chicago, a member of FOMC Charles Evans spoke on Wednesday; he said that the labor market was now vibrant. According to him, the Federal Reserve has reached to a point where it was pausing its policy. The economy was doing remarkably well in his view, and it was an excellent time to watch the macroeconomic data.

He added that Federal Reserve should be averaging 2% inflation and expected growth in employment at almost 100K jobs a month.
Last week the Fed Chair Jerome Powell said that it would take a significant and persistent rise in inflation for the Federal Reserve to move rates higher. Following his comments, Evans said that he was personally worried that inflation was too low, and there was a need to be willing to get past 2% inflation, closer to the Federal Reserve target.

Amid the lack of any supportive fundamentals of gold, investors started to sell the yellow metal and send gold prices back to $1,470 level.

However, the sensitive nature of gold towards political uncertainties boosted its prices a little at the ending of the session after the fears of no-deal Brexit entered the market again.

PM Boris Johnson set a hard deadline of December 31, 2020 to reach a new deal with the EU, which revived the fears of a chaotic departure from the bloc. Gold, in response, had a little support from this and jumped back to the level it started its day with at $1,475.

Daily Technical Levels
Support Resistance
1477.70 1484.20
1474.80 1487.80
1471.20 1490.70
Pivot Point: 1481.30

Gold continues to exhibit choppy sessions within a broad trading range of 1,480 to 1,470. Due to the lack of US-related economic events, we may see XAU/USD moving in the same trading range. Traders can sell below 1,480 and buy above 1,470 level today.

Good luck!

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