Gold price is up today and is now trading at 1495, having opened for the week at 1488.37. Gold (XAUUSD) bounced off the 1482 support level after ending last week lower on firm risk-on sentiment, brought on by positive headlines from the US-China trade talks in Washington.
President Donald Trump has talked up possibilities of a deal in the first phase of negotiation between the two sides. According to Trump a “substantial Phase One deal” had been reached with China.
China has also spoken of “substantial progress” being made after Friday’s talks, but also emphasized on “respect” being an essential ingredient that would facilitate successful trade talks in the future.
This latest meeting is the first of many of such meetings that are to come, and there is a 5-week period within which both sides are to document the outcomes of the discussions in Washington. The earliest statement is therefore expected in November. Until then, markets would have to continue working with snippets from the talks that may be leaked to the media.
With no economic indicator of note to be released today, gold price will continue to be subject to the prevailing risk sentiment in the markets.
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Technical Play for Gold Price (XAUUSD)
Price is currently testing a minor intraday resistance (September 30 high). This is also the price at which the lows of October 3 and 4 acted as previous support and are now working to resist price.
The daily pivot at 1488.61 is now the intraday support level. Further intraday support lies at today’s low of 1482, which is where price had previously found support on Aug 13 and September 30. The same price level reversed lows and became a resistance (high of October 2).
A break above the 1495 price level will push price towards the 1503 R1 pivot, acting as the initial resistance. Above this level, 1510 will act as major resistance, having been tested previously without being broken since September 13. Price will need to have strong impetus from risk-off sentiment to be able to approach and break this resistance, after which 1517 (R2 pivot comes into focus).
On the flip side, a breakdown of the daily pivot brings the support at intraday low of 1482 into focus. Below this level, further downside target lies at 1474 (October 2 and 11 lows).