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Gold shows restrained growth amid declining risk appetite

Apr 30 2019, 04:11 PM (+06) |

Gold on Monday was trading with a decline, despite the lower pressure from the dollar, whose index for the day sank by 0.15%.

The situation on the stock exchanges, where increased investor interest in risky assets is still high, had a strong pressure on gold quotes. Investors positively assessed the data on the growth of profits of Chinese industrial companies, as well as good statistics from the United States. Against this background, the demand for gold, as the main protective asset, drops significantly.

Today the market situation has changed. Stock markets responded with declines in published statistics from China. The published PMI of the manufacturing and non-manufacturing sectors turned out to be lower than market expectations and data from the last reporting period, which again heightens investors' concerns about a further recovery in the Chinese economy. Against this background, traders are once again turning their attention to gold and other protective assets.

Promotes the growth of gold also the dynamics of the dollar, which is still in the red zone. Today, the market will focus on the data of the initial estimates of EU GDP growth in the 1st quarter of this year, as well as statistics from the USA on pending sales in the real estate market and the consumer confidence index CB. For both indicators, investors expect the publication of stronger data than in the previous period, which can support the dollar locally, but the most anticipated event for investors is still the FOMC meeting, the results of which will be summed up tomorrow.

On the hourly chart, the upward correction continues to develop. Yesterday, the price met resistance at 1287.50, but today the buyer managed to keep the price above 1279.50. Therefore, the scenario with a short-term growth of quotations remains relevant. The target range is between levels 1287.50 and 1294.00.

Resistance Levels: 1287.50, 1294.00, 1310.00;

Support levels: 1279.50, 1277.00, 1270.00.


The main scenario is a decline to 1279.50.

An alternative scenario - consolidation above 1287.50 and growth to 1294.00.

Today, gold receives moderate support from the fundamental factors that contribute to the further development of the upward corrective movement. The chart also has signals indicating continued upward movement, so intraday traders should consider short-term longs, with moderate targets in the range between 1287.50-1294.00.

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