Gold Technical Analysis: Consolidation likely ahead of US employment cost data

Gold prices fell on Tuesday as the U.S. dollar firmed on renewed fears of intensification in the Sino-U.S. trade war and worries over slowing global economic growth. Investors took cover in the greenback after Bloomberg reported that Washington is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between U.S. President Donald Trump and Chinese President Xi Jinping fail to ease the trade war.

There is a little bit of pressure from the dollar for now. But, overall gold prices look fundamentally supported. Market sentiment is still very cautious. As of writing this article, XAUUSD is currently trading at $1223.66 an ounce down by 0.46% on the day, while US Gold futures GCcv1 is currently trading at $1225.30 an ounce down by 0.18% on the day. Gold prices have started seeing some strength, unlike the previous two quarters, from geopolitical factors.

Oil Prices Were Dragged Down by Concerns That Sino-U.S. Trade Dispute Will Dent Economic Growth

The dollar is still very strong and may limit the upside in gold prices. But it doesn’t look like gold will lose steam due to the dollar vigor in near future. Gold prices have gained about 6 percent since declining to $1,159.96 an ounce in mid-August, the lowest since January 2017. Choppy sessions in global equity markets last week pushed gold to $1,243.32, its highest since July 17 on Friday. The rally in gold seems to be exhausted near the level of $1,240.

To break this level, it really needs big triggers. It was a correction in the equity markets that provided the recent upside in gold. For gold to breach the resistance around this price range, equity markets need to see a sharp decline or bottom out due to trade war proceedings, which doesn’t seem likely in near future.  So the chance for an upside move in gold is low and highly likely to be capped in mentioned price range if it manages to climb that high despite lack of powerful trigger.

Trend: Consolidation

XAU/USD

Overview:
    Last Price: 1217.64
    Daily change: -5.4e+2 pips
    Daily change: -0.438%
    Daily Open: 1223

Trends:
    Daily SMA20: 1226.14
    Daily SMA50: 1208.88
    Daily SMA100: 1207.1
    Daily SMA200: 1248.52

Levels:
    Daily High: 1230.58
    Daily Low: 1219.6

    Weekly High: 1243.43
    Weekly Low: 1219.9

    Monthly High: 1212.64
    Monthly Low: 1180.63

    Daily Fibonacci 38.2%: 1223.79

    Daily Fibonacci 61.8%: 1226.39

    Daily Pivot Point S1: 1218.21
    Daily Pivot Point S2: 1213.41
    Daily Pivot Point S3: 1207.23
    Daily Pivot Point R1: 1229.19
    Daily Pivot Point R2: 1235.37
    Daily Pivot Point R3: 1240.17

(source: FX impire.com)