After a brief pullback on Friday, gold price activity (i.e. XAUUSD) resumed its upside move in early Monday trading, but price move has been sluggish as the yellow metal contends with an intraday resistance at the central pivot price of 1505.89. Expectations of a further 25bps rate cut by the Fed this week is helping push a little upside momentum.
However, optimism from the US-China trade situation and positive US bond yields are helping to limit these upside moves by cloaking the market with a risk-on sentiment. The latest news from the US-China trade war front is that the US Trade Representative (USTR) indicates that both countries have made good progress in talks and look set to finalize the Phase 1 deal, which could be signed as early as mid-November.
The major news event that will affect gold price this week is the rate decision on Wednesday from the US Federal Reserve. The Non-farm Payrolls report scheduled for release on Friday could also be a gold price mover.
Technical Outlook for XAUUSD
Gold price action may be muted on Monday and Tuesday, as traders start to reposition themselves for the aforementioned economic indicators. Trading before these indicators are released to the market is usually muted and this may explain the lack of range seen so far in Monday trading.
Intraday, the central pivot at 1507.60 remains the ceiling of the daily range, while the floor lies at 1501.65. A break of the central pivot may open the door to 1514.70 (R1 pivot resistance).
On the other hand, price retreat below the range floor could target 1497.36 (S1 pivot). Failure to break either of the two barriers leads to further range-trading on low volumes for the day.