Gold: Picking up the pace in Tokyo, U.S. dollar on the backfoot
|- Gold has been on the bid in Asia with a drop in the greenback following news that Xi and Trump have agreed to a cease-fire on trade tariffs.
- Gold is currently trading at $1223 from a high of $1224 and a low of $1221.
Gold has started to pick up the bid on a stronger dollar in Tokyo, a little late to the party but nonetheless on the move. The move follows Trump and Xis agreement to hold off on additional tariffs on each other's goods at the start of the new year to allow for talks to continue for 90 days.
The U.S. has agreed to leave tariffs on more than $200 billion worth of Chinese products at 10 percent. If after 90 days the two countries are unable to reach an agreement, that rate will be raised to 25 percent, according to the White House.
Gold was lower on Friday due to a more positive climate for the dollar on the last trading day of the month, despite the recent switch of tone from Fed's chairman Powell who delivered a dovish speech earlier the week, confirming suspicions that the Fed was nearing its neutral range target. Spot gold traded to the lowest level since 28th Nov, down at $1216.64 before recovering to $1,222.45 for the close.
Gold levels
- Support levels: 1,220 1,216 1,212
- Resistance levels: 1,228 1,232 1,236
Technically, the yellow metal is looking heavy and testing the 21-D SMA located at 1220, pierced by the long lower wick on the daily candlestick with price even threatening a break of the 50-D SMA at 1215. To the downside, a deeper decline and a break of 1200 opens the 2018 lows at 1160 on the wide. However, 1180 double bottom lows will be critical on the way there. Bulls will need to get over the 38.2% retracement Fibo of the 2018 decline to recent lows at 1238.
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