Daily Brief, Sept 08 – Everything You Need to Know About Gold Today!  - Forex News by FX Leaders

Daily Brief, Sept 08 – Everything You Need to Know About Gold Today! 

Posted Tuesday, September 8, 2020 by
Arslan Butt • 2 min read

Good morning fellas,

The GOLD prices closed at 1,928.35, after placing a high of 1,941.33 and a low of 1,924.19. Overall, the movement of the precious metal remained flat throughout the day. In the Asian trading session, gold prices were up, as investors moved towards safe-haven assets. The weak US economic data released last week raised concerns for the global economic recovery from the coronavirus pandemic.

The US data revealed a further slowdown in the growth of employment, and a rise in the permanent job losses in August triggered doubts over the sustainability of the economic recovery, which was already affected by the resurgence of coronavirus cases all over the world. According to Johns Hopkins University data, there are almost 27 million coronavirus cases globally, as reported on Monday. These fears kept the risk sentiment under pressure and supported the upward movement of the yellow metal prices on Monday.

Meanwhile, Labor Day, which was celebrated in the United States on Monday, kept the gold prices in a consolidation range, as the US markets were closed. In the absence of any macroeconomic data from the United States, the investors followed China’s macroeconomic data updates. On Monday, China also released customs data for August, which showed an increase in exports by 9.5%, compared to July’s increase of 7.2%. However, the imports in August fell by 2.1%, against the  previous decline of 1.4%. China’s Trade Balance for August exceeded the expectations of $ 50.50 B, coming in at $ 58.93 B, in comparison to July’s $ 62.33B.

Gold prices suffered a bit after the Chinese Trade Balance release that showed a surplus, raising hopes for recovery. However, on Sunday, US Treasury Secretary Steven Mnuchin said that details of the next stimulus package would be finalized by the end of this week. He added that the bill would fund the federal government until the beginning of December.

This announcement came in after Congress and the White House reached consensus, with Mnuchin and Nancy Pelosi, both willing to extend funding. As the current funding will run out at the end of this month, the measures that have been announced are intended to avert a government shutdown.

These positive comments from Mnuchin also weighed on gold prices, and the yellow metal lost all of its daily gains, closing the day at the same level on which it started, resulting in flat movement throughout the day.

On the plus side for safe-haven metal, the US Trump administration was set to ban some or all products made with cotton from the Xinjiang region in China, on the basis of human rights violations.

The report published by the New York Times late on Monday, suggested that a potential ban could be announced on Tuesday, on the back of the use of forced labor by members of the Muslim minority in Xinjiang. The US lawmakers proposed a bill in March, regarding the prevention of goods produced by forced labor in the Xinjiang region from reaching the United States. This raised concerns over the escalation of US-China tensions, and helped the gold prices gain traction in the absence of American traders in the markets.

Daily Technical Levels

Support           Resistance

1,929.24           1,946.19

1,921.37           1,955.27

1,912.29           1,963.14

Pivot Point:    1,938.32

Gold prices continue trading sideways, at around 1,927, with immediate support at 1,927 and resistance at 1,931. On the higher side, the XAU/USD may find the next resistance at the 1,940 level, upon the breakout at the 1,931 level. Conversely, a bearish breakout at the 1,922 level may lead gold prices towards the 1,917 level. Good luck!

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