Friday, 15 March 2019
GOLD
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fundamental review
On Thursday, the gold price fell amid a recovery in the dollar and weak statistics from China.
For several days, the US currency was under pressure from domestic statistics, which were slightly below market expectations. Yesterday, there were no important economic reports in the United States, so the dollar was able to partially restore its position. Since gold is nominated in dollars, the increase in its value makes the yellow metal more expensive for most investors.
China yesterday published a weak report on industrial production, which put pressure on the entire market of non-ferrous and precious metals. China remains the largest consumer of metals, so a further decline in economic activity will adversely affect on physical demand for metals. As a result, at the end of the day, gold lost just over 1% in price, silver declined by 1.8%, platinum lost 1.7% in price.
Today the market is trying to recover due to the weakening of the dollar. USD index is still being traded with a decrease of 0.1%. But, the situation as a whole remains rather uncertain, since the market is currently influenced by some factors that are completely unknown. Investors are waiting for the resolution of the trade conflict between the United States and China, but when and how it will be resolved is not yet clear. Trump said today that the negotiations are going well, but so far they can not unequivocally answer the question whether the parties will succeed in concluding a deal. Earlier it became known that the American side decided to postpone the meeting of Trump and Xi Jinping from late March to April. Therefore, most likely in the coming weeks, the signing of a trade agreement should not be expected.
The problem of Brexit, which investors have been closely watching this week, remains unresolved. Yesterday, the British Parliament voted to postpone Brexit. But the timing will depend on the further results of the voting, which will take place next week. If the parliament accepts the May’s plan by March 20, Brexit will be rescheduled for June 30. If parliament rejects the May plan, Brexit will be delayed for a longer period.
On the chart, there are still more signals in favor of resuming upward movement and further development of a bullish trend that has dominated the market for several months. But, this option does not exclude the possibility of forming a short-term kickback price movement, in order to retest the support area located in the region of 1290.00. Therefore, today we focus on the level of 1300.00. If the price manages to overcome it - we are waiting for growth to 1310.00. If the level of 1300.00 is not passed - the option with the retest of the level of 1290.00 will be relevant.
Resistance Levels: 1300.00, 1310.00, 1315.00;
Support levels: 1297.00, 1290.00, 1285.00.
The main scenario - a decline to 1290.00.
An alternative scenario - consolidation above 1300.00 and growth to 1310.00.
Locally, the market situation remains rather uncertain, although for a longer perspective, the graph has significantly more signals in support of the growth scenario. Today better to refrain from active trading with gold.
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