Daily Brief, Jan 1: Happy New Year 2020 – Quick Update on Gold
Arslan Butt • 2 min read
Good Morning, fellas.
Team FX Leaders wishes you a very Happy New Year 2020 with the hope that you will have many blessings in the year to come. Today, the global financial markets remain closed, so we won’t have any opportunity to open trades. However, I will take this opportunity to explain the factors that impacted gold on Tuesday.
Gold prices closed at $1520.24 after placing a high of $1525.27 and a low of $1514.56. Overall the trend of gold remained bullish throughout the day.
Gold prices edged higher on Tuesday and crossed above $1525 per ounce level at the ending day of the year. Gold rose to its highest level since September on Tuesday and ended 2019 with a total of 18.9% for the year.
On Tuesday, the US President Donald Trump said in a tweet that the phase-one trade deal with China would be signed at the White House on January 15. He added that he would also travel to China to discuss the second phase of the trade deal.
Apart from the trade deal, the investors also kept an eye over the developments in Iraq, where two days earlier, the US conducted airstrikes. On Tuesday, in Baghdad, Iraqi Shiite militiamen and their supporters broke into the US Embassy compound as a protest against the airstrikes by the United States.
In response, Donald Trump gave threats that in case of any loss of life, or damage, Iran would be held responsible and that they would have to pay a high price for that. He added that it was not a warning but a threat.
The increased tensions of the United States with the Middle East created a safe-haven appeal in the market, and as a result, gold which is the safest haven asset surged to 3 months’ highest level and crossed $1525 on Tuesday.
The US dollar index, which measures the value of the US dollar against a basket of six major currencies, was dropped 0.4% to the level of 96.365 on Tuesday. Gold has been gaining strength throughout the year from lower US bond yields, ongoing US economic uncertainty, US-Sino trade war, and persistent geopolitical risks.
On the other hand, the CB Consumer Confidence from the United States which released at 8:00 GMT showed a decline to 126.5 against the expected 128.0 for the month of December and weighed on the US dollar.
The weak US dollar across the board also aided in the upward direction of the yellow metal at the ending day of 2019. Watch out the trading levels for today.
Daily technical Levels
Pivot Point: 1517.07
Once again, good wishes for the New Year. Enjoy your day!