Gold analysis – 31 Oct 2019

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By: Ahura Chalki

Gold after Rate cut and GDP, before NFP!

For now, most concerns about Gold price movers, have been solved. Brexit is clear almost with a delay at 31. January 2019, FED cut the rate by 25bp, as it was expecting and the US DGP for Q3 published at 1.9%, better than 1.6% of expectation. Now we have NFP ahead by tomorrow. The lower rate in short term effecting in the USD rate, since cash will be more in the market, however at the same time it means there are better opportunities for business to develop and it is usually green for stock markets. So in the short term, how it happened, based on lower USD, gold price rose, but in the longer term, it must be negative for the Gold price, since hoped will be back in the business and fewer requests for safe-havens as Gold to invest and keep the cash, there. On the other hand, better than expected GDP also will help the market to have a brighter outlook on economic growth and it is also in same line as mentioned for the lower rate, which means bears will be wanted in the middle and long term, as the economy will do better.

Technical analysis:

EMA200 at the H4 chart sits at $1495.30, which is a key support level for now and breaking this level, especially after confirmation at $1493.85, where the EMA50 and EMA20 sit on each other is the opening of next downtrend. RSI moves above 55-level and Stochastic still moves higher in the overbought area, both for now supporting the bulls, while Parabolic SAR reached the candles from above with signaling of changing the trend to the downside. While the gold trading at its 38.2% of main Fibonacci, trading above or under $1493.85 and $1504, as key support and resistance levels, is the confirmation of the next trend.

Pivot point: 1492.02

Resistance levels: 1502.97 / 1507.22

Support levels: 1487.77 / 1476.82

Today the expected trading range is between 1476.82 support and 1507.22 resistance.


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