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GOLD REPORT

Gold mixed as markets mull uncertainties of Sino-US trade talks

A weekly market summary for gold, Nov 18-22

GOLD prices illustrated varied signals as investors mulled over US-China trade uncertainties. Shifting market expectations over contradictory messages in the 16-month-long US-China trade spat let to choppy conditions in global markets.

The safe haven asset demonstrated range-bound trades as markets balance between a strong rally in global equities and looming geopolitical risks.

Gold prices will continue to navigate against strong cross-currents as US-China trade headlines dominate market sentiment for the current term.

What should investors look out for in the longer term?

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Market voices on:

The US Federal Open Market Committee meeting minutes (Oct 19) have indicated a likely end to its mid-cycle policy adjustment. US Federal Funds Rate looks poised to stay within the range of 1.5-1.75 per cent as Fed policymakers maintain a neutral outlook in monetary policy (Dec 19).

Financial markets are only discounting for a single 25bps cut in 2020 for the current term.

Gold prices, though receiving support over global trade uncertainties (Q4), will face considerable headwinds as investors pare back haven demand over an improvement in global risk appetites come Q1 2020.

Technical Analysis for Spot Gold (XAUUSD)

The precious metal indicated range-bound trading conditions as markets remain irresolute on price trajectory. Strong resistance at US$1,478.00 led to a weakening of gold prices as market bulls pared back early-week gains.

Gold bulls must break above previous-week highs for a continuation of the positive trend scenario towards the next main station of US$1,492.00.

Failure to hold above key trend line support of US$1,445.00 (61.8 per cent Fibonacci Retracement) will trigger a sharp bearish correction in gold prices towards the US$1,400.00 mark.

Weekly Market Assessment:
Range-Bound
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