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Gold face headwinds over robust risk appetites

A weekly market summary for gold, Nov 25-29

ROBUST global risk appetites have spurred US indices to record highs while imposing considerable headwinds on safe haven assets.

Upbeat US economic data and global trade optimism has led to a shift in market expectations as investors turn increasingly risk-on for the current term.

Gold prices, though facing strong resistance, continue to receive support as markets contemplate political machinations between the world's two largest economies (after US President Trump signed into law the Hong Kong Human Rights and Democracy Act).

What should investors look out for in the longer term?

Market voices on:

US-China trade developments will remain of key focus as investors fixate on headline trading activities.

An extended rally in global risk assets will limit upside potential for the precious metal as investors pivot towards interest-yielding assets for the current term.

Traders should however stay cautious of Beijing's response on the newly minted US bill, as harsh retaliatory measures will propel safe haven buying as markets turn risk-off over global trade uncertainties.

Technical Analysis for Spot Gold (XAUUSD)

Gold prices have indicated tight ranging activities whilst closing in towards previous lows (Nov-19) of US$1,445.00.

The precious metal has indicated strong bearish signals, and a successful break at key support level of US$1,445.00 will pressure price levels towards the key psychological level of US$1,400.00 in the immediate term.

On the flip side, gold bulls will have to breach key resistance level of US$1,462.00 for a bullish continuation towards previous highs (Nov-19) of US$1,478.00.

Weekly Market Assessment:
Key Resistance Level (1): US$1,492.00
Key Resistance Level (2): US$1,478.00
Key Support Level (1): US$1,456.00
Key Support Level (2): US$1,445.00

  • The writer is an investment analyst at Phillip Futures