- Gold fails to hold onto recovery gains amid a lack of major drivers, greenback recovery.
- NY Empire State Manufacturing Index unexpectedly rose, Brexit deal hopes renew.
- Asian statistics/events, return of the US/Japanese/Canadian traders can provide the active session.
Having failed to cross 21-day Exponential Moving Average (EMA) during its Monday’s recovery, Gold prices pull back to $1,492 amid the initial Asian trading session on Tuesday.
Receding optimism surrounding the US-China trade deal and doubts over the Brexit deal can be considered as major drivers of the yellow metal’s U-turn at the week’s start. However, recently published New York (NY) Empire State Manufacturing Index surprised markets with an upbeat figure and is ascertained to have triggered the Bullion’s pullback.
The United States’ (US) manufacturing gauge for October released before time and surpassed market consensus of 1 and prior of 2 with 4.
It should also be noted that a lack of fresh clues concerning the US-China trade deal and likely solution to the Irish backstop, as conveyed by the Daily Telegraph, might have contributed to the safe haven’s latest declines.
Although trade/Brexit will be the major drivers, China’s inflation numbers and Japan’s Industrial Production will entertain momentum traders as with the return of Japanese/US and Canadian players from the extended weekend.
Technical Analysis
While a 21-day EMA level of 1,499 acts as an immediate resistance, a downward sloping trend-line since early September, around $1,514 could limit the Bullion’s near-term advances. Alternatively, a rising support-line since August-start, at $1,468, could become the key support to watch during further declines.
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