Support at the previous low around $1,1459.00 held on XAUUSD as risk aversion keep investors jittery. Gold prices opened at $1,455.52 and steadily climbed higher to reach an intra-day high at $1,466.83 before closing at $1,463.00.
The precious metal recouped some of its losses against the US dollar yesterday partly due to short-covering in futures markets. Downward pressure on gold eased as December futures increased by $8.10 to $1,465.10.
The lack of updates on trade negotiations also kept investors worried and at the edge of their seats. There has been no new developments on the US rolling back its tariffs on Chinese goods. In fact, US President Donald Trump even warned that he could impose higher tariffs if they fail to come into agreement with China. The Trump administration has also been mum about imposing levies on European-made cars despite them setting a deadline for their decision today.
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Gold Outlook
Earlier in today’s Asian session, gold also enjoyed some bids when data from China came in worse than expected. Industrial production for October printed at 4.7% and missed forecasts for a 5.5% growth rate. Retail sales also disappointed at 7.2% versus the 7.8% consensus. Fixed asset investment grew by 5.2% from a year ago which was less than the forecasted 5.4% uptick. Signs that the Chinese economy could be slowing down only added to risk aversion.
XAUUSD has found support at the 100 SMA on the hourly time frame while testing resistance at yesterday’s highs around $1,466.83. It also looks like it could be forming a potential inverse head and shoulders chart pattern too.
Risk aversion could trigger a flight to safety and push XAUUSD past resistance at $1,466.83. A break of the neckline could mean that it would soon test the next resistance level at its November 7 highs at $1,472.78.
On the other hand, positive developments could spark risk appetite and push XAUUSD back down to its monthly lows at $1,445.67.Download our latest quarterly market outlook for our longer-term trade ideas.
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