Daily Brief, Jan 2: Things You Should Know to Trade Gold On Thursday
Arslan Butt • 2 min read
Good morning, traders.
The market has opened for trading, but the volatility remains pretty thin due to a lack of trading volume. On the fundamental side, it’s mostly light, but the focus will remain on the UK Final Manufacturing PMI figures, which is likely to drive price action in the GBP pairs today. Speaking of GOLD , the market hasn’t moved much, and the fundamental side is mostly the same as the markets were closed in the wake of January 1 holiday.
During the previous working day, the yellow metal 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 gain of 18.9% for the year.
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, investors also kept an eye over the developments in Iraq, where 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, 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.
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
Gold is trading with a bullish bias after testing the resistance to become a support level of 1,516. Closing of candles above this level is suggesting the chances of a bullish trend in the XAU/USD. On the upper side, gold’s immediate resistance stays around 1,522 and 1,526 today. We may experience choppy sessions due to a lack of significant news in the market. Good luck!