Daily Brief, Jan 20 – Everything You Need to Know About Gold Today
Arslan Butt • 2 min read
Good morning, traders.
Gold prices closed at $1556.830 after placing a high of $1561.250 and a low of $1549.330. Overall the movement of gold prices remained bullish throughout the day. On Friday, gold prices edged higher amid rising doubts about the China & US trade deal. Both countries signed the phase-one trade deal on Wednesday, but the deal was criticized because of its loopholes.
Traders were not sure that the deal would help to maintain a cordial relationship between the United States & China as most of the tariffs were still in place and haven’t been removed. According to the deal, China agreed to purchase an additional $200 billion of US products & services over the period of the next two years. But, the tariff on $360 billion worth of Chinese goods from the US and the tariffs on over $100 billion worth of US products by China remain unchanged.
If tariffs were not removed, that means the chances for global growth risks also persist in the market, and this risk helped the yellow metal prices to surge on Friday.
Furthermore, the comments from Middle East reminded traders about the tensions of the US & Iran and supported gold prices a bit. On Friday, the President of Iran, Ayatollah Ali Khamenei, called the US President, Donald Trump, a “clown” who pretended to support Iranian citizens but pushed a “poisonous dagger” into their backs. He added that the United States showed its terrorist side by the targeted killing of the Quds Force Commander, Qassem Soleimani.
On the other hand, the President of the Philadelphia Federal Reserve Bank, Patrick Harker, said on Friday that the US economy was in good shape. He added that the data from each report released throughout 2020 would drive his outlook for the economy. He also said that data would determine the outlook for monetary policy as well as interest rates. According to Harker, the labor market was doing very well, and the economy of the US was near its target of 2% inflation.
These comments from Harker put pressure on the rising prices of GOLD and restrained them from surging above $1561 level. On the data front, the Building Permits from the US dropped to 1.42M from the expectations of 1.47M in the month of December and supported gold prices.
Daily Technical Levels
Pivot Point: 1557.52
Gold’s bullish trend continues as the metal is heading towards the resistance level of 1,561. Continuation of bullish trend can extend until 1,567. Whereas, the closing of candles below 1,561 can drive bearish trend until 1,557 before showing further buying in gold. Good luck!