Gold price (XAUUSD) briefly touched the ceiling of its trading range for the week early this morning, but retreated slightly after mixed Chinese data. China’s GDP came in at 6.0%, which was the worst it had been since the 90s. However, Chinese Industrial Production increased by 5.8%, which was remarkably more than the 5.0% that the markets had predicted.
This situation presented some kind of conflict, so the risk-on or risk-off sentiment that could have been presented if both results tallied in the same direction did not really kick in. This is probably why gold price action was relatively subdued in response to the Chinese GDP data.
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Intraday Outlook for Gold (XAUUSD)
So what will be the next move for XAUUSD? Attention now shifts to the Brexit vote on Saturday in the UK Parliament. The Brexit negotiations, the new agreement and the opposition to this agreement by the Northern Irish Democratic Unionist Party have been the predominant fundamentals influencing price action in the currency market. Saturday’s vote in the UK Parliament to ratify the agreement may or may not have implications on gold price going forward.
Yesterday, XAUUSD was able to touch my identified range ceiling of 1495.79 but did not break above it. Gold price is therefore back in the range and is trading at 1488.89. Price action is still quite muted. It probably will be until the Brexit vote of tomorrow.
The closest intraday support continues to remain in the zone that lies between 1482.33 and 1484.43. If risk-on sentiment is brought on (possibly by passage of the Brexit deal), we could see gold break below this price level, which makes 1477 and 1461 possible downside targets. This move would also signal a downside break of the symmetrical triangle, which could have further bearish implications for gold price action.
On the flip side, risk-off sentiment (which could occur if the Brexit deal is not passed tomorrow) could spur renewed gold buying, which will challenge the immediate resistance zone between 1495.79 and 1498.31 (today’s R1 pivot, close to yesterday’s highs). Further bid on XAUUSD could take prices above 1504 and towards 1512, which now breaks the symmetrical triangle to the upside with further potential to push towards 1525.
So keep your fingers crossed and watch for tomorrow’s Brexit vote in the UK Parliament.