There is a variation of the reports around the possibility of signing the “Phase 1” agreement between the U.S and China, between the nearing of the signingو the threat of an escalation, and the return to negotiations until further notice. We have noticed the volatility of Gold prices during last week’s trading, as it tried to rise to the $1479 resistance, then dropped again at the end of the week towards the $1461 support, where it closed the week’s trading. The awaited trade agreement will remain the center of attention for gold investors.
Tramp, through his controversial tweets, first threatened to impose more tariffs on Chinese imports amid no progress in the trade negotiations. The he later referred to positive progress towards a potential trade agreement.
The US Federal Reserve suggested that the rate cut cycle has ended for the time being, which supported the USD through most of November. However, the most important developments for the dollar this week will be the ones coming from the trade negotiations with China. Investors will be keen specifically on knowing if the Tramp will sign the Hong Kong Human Rights and Democracy Law which was passed by the Congress last week, if he does, this will complicate the path towards signing the “Phase 1” deal between the US and China.
As for the economic data, the US Manufacturing and Services PMIs exceeded expectations, while the composite PMI matched them. On the other side, the ongoing unemployed claims exceeded 1.685 million to 1.695 million claims, while the initial claims came less than 219,000, at 226,000. On the other hand, the Philadelphia Manufacturing Index exceeded expectations calling for a reading of 7, with a reading of 10.4. This week, the USD will react to a package of important economic data on Wednesday before the Thanks Giving holiday, with the release of the Durable Goods, the GDP Growth and Personal Consumption Prices Index data, the Fed’s favorite measurement of US inflation. After that, there will be the Expenditure Growth Rate and US Citizen Income data. Before that, on Tuesday, there will be a release of the US Consumer Confident data.
According to the technical analysis of gold: If gold prices succeeded in breaching the $1469 support, from which it bounced at the beginning of October, to the $1500 psychological resistance again, then this will get the interest of gold investors to consider buying from this level or below to form a base for starting prices up again. Currently, the most important support levels for gold will be 1453, 1444 and 1430 dollars respectively. On the upside, the $1500 psychological resistance remains the key to the strength of the upward correction.
Gold is not expecting any significant economic data during today's trading.