Gold fails to hold on to recovery amid broad greenback strength, trade uncertainty

  • Gold prices remain below 100-day EMA.
  • Optimism surrounding the US economy, upbeat Fedspeak confronts doubts on US-China trade deal.
  • Powell’s testimony, US CPI will be the key to watch.

Although pessimism surrounding the US trade relations with China and the EU, coupled with Hong Kong protests, favored Gold to bounce off multi-month lows on Tuesday, prices are again under pressure while taking rounds to $1,458 during Wednesday’s Asian session.

The US dollar (USD) regained its strength the previous day amid upbeat comments from the Federal Reserve (Fed) officials and market’s rush to risk-safety. Extending the greenback’s strength are the latest statements from the United States (US) President Donald Trump and White House (WH) Adviser Larry Kudlow. Both of them showed optimism concerning the domestic economy, challenged the Fed’s monetary policy and increased doubts on future trade relations between the US and China.

While the US President Trump stood ready to inflate tariffs on Chinese products should the deal fails, Mr. Kudlow said tariff reduction could be the part of the phase one deal but not until the entire deal is put together. On the other hand, the Federal Reserve Bank (Fed) of Minneapolis President Neel Kashkari recently said that he is feeling a bit better about the US economy than he had a few months ago.

Elsewhere, Hong Kong protests continue while the US and China arguing each other. The US blames the dragon nation limiting Hong Kong’s autonomy while China almost warns the Trump administration to stay away from the internal issues.

Even so, global bonds stay mostly unchanged, despite being downbeat, while stocks are waiting for the US Federal Reserve Chairman Jerome Powell to testify in front of the Joint Economic Committee. Also contributing to the wait and watch mode in October month Consumer Price Index (CPI) from the US.

Concerning the data/events, TD Securities said, “We look for headline inflation to remain unchanged at 1.7% y/y in October, partly aided by an increase in energy prices, while core inflation should decline a tenth to 2.3% y/y. In particular, we expect core goods inflation to recover m/m, but for core services inflation to slow to 0.2% m/m after four straight increases at 0.3%. Conversely, we expect Chair Powell to largely reiterate the FOMC policy message that monetary policy and the economy remain "in a good place" at the start of his two-day visit to the Hill on Wednesday.”

Technical Analysis

Unless breaking 100-day Exponential Moving Average (EMA) level of $1,464, prices are less likely to revisit $1,500 area, which in turn highlights the importance of a three-month-old falling trend line support, at $1,431 now.

additional important levels

Today last price 1458.49
Today Daily Change -0.32
Today Daily Change % -0.02%
Today daily open 1458.81
Daily SMA20 1488.65
Daily SMA50 1496.26
Daily SMA100 1477.56
Daily SMA200 1391.89
Previous Daily High 1460.35
Previous Daily Low 1445.8
Previous Weekly High 1514.85
Previous Weekly Low 1456.43
Previous Monthly High 1519.04
Previous Monthly Low 1455.5
Daily Fibonacci 38.2% 1454.79
Daily Fibonacci 61.8% 1451.36
Daily Pivot Point S1 1449.62
Daily Pivot Point S2 1440.44
Daily Pivot Point S3 1435.07
Daily Pivot Point R1 1464.17
Daily Pivot Point R2 1469.54
Daily Pivot Point R3 1478.72



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

AUD/USD advances above 0.6950 as risk-on mood dominates

Following a bearish opening gap, AUD/USD has recovered ground and trades above 0.6950, tracking the bounce in the S&P 500 futures. The bulls shrug off US-China tensions and the worsening coronavirus situation in the US and Australia. 


USD/JPY stays depressed below 107.00 within descending triangle

USD/JPY is trading in the red on Monday near 106.80. The pair has carved out a big descending triangle over the past 3.5-months. At press time, the lower end of the triangle is located at 106.10, and resistance is seen at 108.93. 


Gold hovers above $1,800 as dollar drops despite lingering coronavirus concerns

Gold rises 0.30% as the dollar index drops 0.20%. The US stock futures rise, keeping the safe-haven US dollar under pressure. The US coronavirus cases tally crosses the 3.3 million mark. 

Gold News

Data, earnings, central banks and virus cases in focus

Risk appetite took a turn for the better at the end of last week despite an array of the usual suspect risk factors (accelerating Covid-19 cases, US-China tensions, rich valuations). 

Read more

WTI: 200-HMA probes bears above $40.00

WTI stays pressured beyond $40.00 despite multiple bounces off 200-HMA. MACD conditions suggest bears rolling up their sleeves for entry. Bulls will have multiple upside barriers beyond $41.00.

Oil News