Gold prices traded lower in yesterday’s trading as the preliminary Q3 2019 GDP report top forecasts. XAUUSD closed lower at $1,454.12 from its open price of $1,461.05.
According to the initial reading of the US’ third quarter GDP numbers, the economy grew by 2.1% versus the market consensus of 1.9%. This triggered a demand for the US dollar as it affirms the Fed’s stance that the economy is doing well enough not to warrant further easing.
Don’t miss a beat! Follow us on Telegram and Twitter.
XAUUSD Outlook
However, it’s worth discussing that US President Donald Trump has signed the Hong Kong rights bill into law. This could possibly be detrimental to the US-China trade deal negotiations as the Chinese have previously warned against this move. There are speculations that China could retaliate by imposing tariffs on US-imported goods. This could then make a trade deal unlikely by this year.
If these worries are confirmed, we could see risk aversion dominate market sentiment and trigger a demand for safe haven assets, including gold.
Gold prices are currently testing resistance at the top of the descending channel (when you connect the highs and lows from November 20) on the hourly time frame.
If XAUUSD closes above today’s Asian session highs, we could see gold prices rally to resistance at its November 26 highs. On the other hand, if the dollar can sustain its gains, XAUUSD could drop to the bottom of the channel around $1,449.95 where it bottomed on November 26.Download our latest quarterly market outlook for our longer-term trade ideas.
Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.