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Gold market is retaining positive technical configuration

Feb 11 2019, 02:19 AM (CST) |

Despite moderate growth on Friday , gold completed the last trading week with a slight decline amid serious pressure from USD dollar. In a broader picture, gold is still traded above 1300 and on Friday managed to close above 1310, which is now a closest support line.

As the second full February week is entering is rights, two main and strategical factors influence the market of yellow metal: US dollar and the geopolitical situation in the world. Last week, White House officials signaled that US-China trade agreement most likely would not be signed until March 1, when the 90-day truce expires. This is not a surprise for us and for parties contradictions are much deeper and fundamental than most medias try to picture. We believe that this trade agreement is hardly possible at all and all depends now on when sides are ready to move to open opposition. Last week Trump promised to introduce a new package of duties on Chinese goods. These reports raised market concerns on international trade and global economy as a whole. For gold, it is a middle term strategical strong support factor.

However, a major gold obstacle is USD dollar. USD dollar produced a series of seven trading days closed in a row with a plus.

This week, relations between US and China, as well as USD dynamics remain in the spotlight. On Monday, a new meeting of China representatives and US on the settlement of trade disputes should take place in Beijing. Today in US and Europe there is no important economic data, so traders will focus on publishing a large block of statistics from the UK.

On Tuesday market will focus on the speech of the Fed Chairman Jerome Powell at an event in Mississippi.

On Wednesday we will look into a large block of economic statistics, which will be based on data on the consumer price index. Also on this day we will look into speeches of some FOMC representatives.

On Thursday there will be a lot of important statistical information from various regions. First, China will present the latest data on the trade balance. Germany will present preliminary data on GDP. EU will present updated GDP data for the fourth quarter. In the US, investors will follow the publication of a report on retail sales.

On Friday, the focus will be on inflation data in China and a large block of US data.

On the chart gold is starting the day with a slight decline, but it still has good opportunities for the resumption of growth. 1,320.00 is currently the main intraday resistance for the price. The support area is located at 1310.00 and lower to 1,3000.

Resistance Levels: 1320.00, 1330.00, 1325.00;

 Levels of support: 1312.00, 1310.00, 1300.00.

The main scenario - growth to 1320.00 and consolidation above this mark.

Alternative scenario - decline to 1310.00

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