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Gold consolidates in the tight range $1276-$1295

Jan 9 2019, 02:03 AM (CST) | Fortfs.com

This week, gold is traded under pressure on the background of trade negotiations between United States and China, which are taking place in Beijing these days. It was originally planned that the negotiations will be held on January 7 and 8, but yesterday the news broke that they were extended on Wednesday, which significantly increases investors' optimism on the possible conclusion of a trade agreement. Bloomberg, citing informed sources in the White House, reports that Donald Trump is the main initiator of a significant intensification of the negotiation process with China, to support declining equities. Trump made a tweet yesterday, noting that negotiations are going very well. At the same time, most experts agree that the current meeting is unlikely to end with the signing of a trade agreement, but its results may be the basis for negotiations at a higher level.

The positive development of the situation with the trade negotiations between Beijing and Washington significantly increases investor interest in risky assets. Major equities indexes continue to grow, which adversely affects the gold dynamics.

Another factor of pressure on the precious metal is the US dollar, whose index ended trading yesterday in positive territory, with a result of + 0.28%. A strong dollar makes gold, which is denominated in US currency, more expensive for many potential investors.

Since trade negotiations between official Beijing and Washington have been extended, this topic will remain one of the key topics at today's session. As long as the negotiation proceeds in a positive manner, the gold will experience a certain pressure and, during the day, is likely to form mainly a downward move. Another important topic of the day is the reports of December FOMC meeting published in the USA, which may shed light on the regulator's further plans for the implementation of monetary policy.

On the chart, gold continues to decline slightly. In recent days, sellers have managed to defend all intraday resistance levels, while buyers continue to pass level after level. Accordingly, local priority is now on the side of the downward move-support at 1280.00 is now a key guideline. Now we are seeing an increase in pressure on this mark, which significantly increases the likelihood of its breakdown. Fixing the price below this mark will signal the further development of the bearish trend with a new goal at 1270.00.

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