FXEMPIRE
All
Ad
Advertisement
Advertisement
David Becker
Add to Bookmarks
Gold USD XAUUSD

Gold prices surged higher rising nearly 1% on Friday. Prices are fast approaching the 2019 highs and are poised to break out. Softer than expected US industrial production data along with weak Chinese inflation data provided the backdrop for higher gold prices. The lower IP in the US combined with Thursday’s softer than expected US retail sales, weighed on the dollar and paved the way for higher gold prices.

Advertisement
Know where Gold is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Technical Analysis

Gold prices surged higher and are poised to test target resistance near the January highs at 1,325, which coincides with a downward sloping trend line. A close above this level would lead to a test of the 2018 highs near 1,365. Short term support is seen near the 5-day moving average near 1,311. Additional support is seen near the 20-day moving averaged at 1,305. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic is in the middle of the neutral range which sometimes reflects consolidation. Medium-term negative momentum has decelerated as the MACD histogram is printing in the red with a rising trajectory which points to consolidation.

Advertisement

Chinese Inflation Was Weaker than Expected

China reported weaker than anticipated consumer and producer prices. CPI increased 1.7% year over year and 0.1% year over year, respectively.  CPI was expected to increase by 1.9% year over year while PPI was expected to increase by 0.3% year over year.  The very low levels of producer prices are pointing to deflation. In a deflationary environment, the yuan will begin to lose its value, attracting Chinese investors to gold.

US and Chinese Trade Talks End

US-China trade talks ended on Friday in Beijing.  Lighthizer and Mnuchin said progress made, yet other reports suggest the two sides remain far apart.  President Xi also saw progress and said that the next round of talks will take place next week in Washington.  President Trump suggested that he is open to extending the March 1 tariff deadline by another 60 days.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker