Gold analysis – 10 Oct 2019


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By: Ahura Chalki

Up or Down, where to go?

China reportedly lowers expectations for progress on trade talks this week after US blacklist (CNBC), Gold has been tested one week high at $1517, while White House dismissed the news, leading the pullback in Gold. At the same time, the New York Times reported Washington will soon issue licenses allowing some U.S. firms to supply non-sensitive goods to China’s Huawei Technologies. Looking at trade talk procedure dose not seems that has met the demands of the market. USDJPY is trading above 107.50, while DXY is above $97.80 and Gold is trading mostly between Middle and the upper line of BB. At the end of the day, still, there are some hopes that since these two largest world economy sitting on a table, there may be some sorts of evens short term agreement, have to wait and see the results by Friday.

Besides this event of the week (Trade Talks), FOMC minutes also could change the equations. Though even most members of FOMC and policymakers now are about to support another 25bp rate cute, Powell mostly highlighted the labor market in the US and FED goal about tracking the 2% inflation rate, in his yesterday’s speech. The US Dollar Index largely ignored the statement and was last flat on the day at 99.12, reported by Reuters. “Several participants said statistical models on the likelihood of a recession in medium-term had increased notably in recent months.” Today’s results of negotiations and the US, CPI data will make the situation, clearer.

Technical analysis:

Last two days, Gold mostly trading above its 38.2% of a Fibonacci level, while EMA200 also supporting this key level with moving very close to that at $1499, which makes this level more important to break down for downtrend or keep the uptrend as long as trading above that. For now and at the H4 chart, still technical indicators supporting the bulls, while checking the H1 and M30 charts, looks like the reversal is about to start. To make sure about the trend, as the market is so volatility, trading with resistance and support levels, as well as key levels, is recommended for today. $1517, is key resistance level, while $1497 is playing the same key level role for bears.

Pivot point: 1506.64

Resistance levels: 1511.64 / 1518.45

Support levels: 1498.82 / 1492.81

Today the expected trading range is between 1492.81 support and 1518.45 resistance.

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