Chinese Numbers Support Gold Gains
In the early hours of the day, a strong contraction of China's industrial production was announced, confirming the negative expectations of the world's two largest economies due to continued trade war. Thus, investors rushed to safe havens, and since gold is among the most important safe haven, it went up to the resistance level at $1295 an ounce, which is closest to the psychological peak of $1300, which will support the bullish correction and draw a picture of a bullish weekly closing. The gold retreated to the threshold of support at $1274 per ounce during Thursday session but quickly moved up again.
The US dollar was second only to the Japanese yen in gaining as a safe haven as the US-China trade war recently intensified. In general, the absence of a final and formal agreement that ends the trade dispute between the United States and China will continue to be a factor contributing to stronger gold price gains. Trump's recent comments, which bear the prospect of reconciling with China after raising tariffs on their products, have eased investors' concerns and have contributed to a halt in gold price gains.
The Federal Reserve Board kept the interest rate unchanged as expected and indicated it was unlikely to raise or lower interest rates in the coming months amid signs of renewed economic health while at the same time inflation was still unusually low. The Bank's policy statement highlighted its continued failure to raise the annual inflation rate to at least 2%. The statement may have raised expectations that a change in the next Fed interest rate is a rate cut to stimulate inflation or growth.
Technically: If gold prices stabilized today below $1300, it will increase the bearish momentum and the nearest support levels will be 1258, 1273 and 1265 and respectively, which support the strength of the bearish trend while at the same time levels can be bought for close targets. On the upside, the nearest levels of gold resistance are currently 1300, 1312 and 1322 respectively. We still prefer to buy gold from every bearish bounce.
In terms of economic data: The yellow metal will all focus on the US dollar level. Gold will also be affected by investors' risk appetite. Gold is one of the most important safe havens.
- Currency Pairs