Spot gold edged higher on Monday but remains within choppy range between $1220 and $1230, as bull-leg from $1196 lost traction on attempts above pivotal barriers at $1225 (Fibo 61.8% of $1243/$1196/bear-trendline off $1243 high).
Bullishly aligned daily techs continue to underpin, but the yellow metal may stay in extended consolidation, awaiting stronger signals from key events due later this week.
Fed chief Powell is due to speak on Wednesday, addressing the economic outlook; Minutes of Fed’s latest policy meeting will be released late Thursday and G20 meeting will start on Friday, with focus on Trump – Xi talks over persisting trade conflict.
Powell is expected to point at steady US economy growth, but the outlook could be overshadowed by rising concerns over possible global growth slowdown, which could also impact Fed’s decision to hike interest rates once more this year in FOMC December meeting.
Markets will be also closely monitoring the outcome of US/China Presidents, as further delay in US implementing increased tariffs on imports from China would leave space for further negotiations, in order to avoid escalation of trade conflict that could have strong impact on world’s markets.
Gold would appreciate on signals increased tensions between world’s two biggest economies, with positive impact to be additionally boosted by signs that Fed may pause in December.
Conversely, positive news would prompt investors into dollar and increase pressure on the yellow metal.
Recent consolidation floor at $1220, reinforced by rising 10SMA, marks pivotal support, loss of which would weaken near-term structure and risk deeper pullback. Bullish scenario requires firm break above cracked Fibo barrier at $1225 as initial bullish signal, which would be boosted by break above $1230/32 (range top/Fibo 76.4% of $1243/$1196) for extension towards $1237 lower platform and possible stretch towards key barrier at $1243 (26 Oct high).
Res: 1228; 1230; 1232; 1237
Sup: 1222; 1220; 1214; 1212
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