Even as doubts about the prospects of a formal trade deal between the United States and China return after President Donald Trump said he did not agree to cut tariffs on Chinese goods, gold prices continued to decline strongly to reach the $1456 support, the lowest in three months, and fell by 3.2% last week, the largest weekly decline since May 2017. The strength of the US dollar was the biggest contributor to the decline in gold, as the US index rose to 98.40 DXY. The relationship between the dollar and gold is inverse, and news that the United States and China are close to signing an agreement to stop tariffs on each other's goods has also contributed to the decline in gold.
Optimism about a possible trade deal between the United States and China faded after reports suggesting that a plan to phase out tariffs on each other's goods in stages had been opposed by some advisers to US President Donald Trump. White House adviser Peter Navarro said the United States had not yet agreed to abolish tariffs, amid reports of differences within the Trump administration over whether to abolish existing import duties.
On Thursday, the Chinese Ministry of Commerce said the two sides had accepted that if the first stage trade agreement succeeds, the United States and China will cut tariffs simultaneously and proportionately. However, the strength in US stock markets last week, and the better-than-expected earnings season contributed to the pressure on gold investors.
As for economic news, US consumer sentiment improved slightly in November, according to preliminary data from the University of Michigan. The report said that the consumer expectations index rose to 85.9 in November from 84.2 in October, while the current economic conditions index fell to 110.9 from 113.2. The report added that the consumer confidence index rose to 95.7 in November after rising to 95.5 in October. Economists had expected the index to rise to 95.9.
According to the technical analysis of gold: Gold prices are expected to move between the $1425 support and $1450 resistance, which are good levels to buy before thinking of rebounding up again. At the same time, psychological resistance at $1500 will remain the bulls' dream for controlling performance again. All this will depend on whether or not investors risk appetite increases, and the gains in the US dollar, which may come under pressure from Federal Reserve Governor Jerome Powell's testimony this week, as well as the release of US inflation figures.
According to the economic calendar data: Today is a holiday in the US markets and gold will react with the announcement of the growth rate of British GDP and manufacturing production index.
