The third week in a row gold completes growth amid increasing concerns related to the slowing global economy and a decline in the US currency.
On Friday, investors received another strong signal of a possible slowdown in the US economy since the publication of weak data on the index of business activity for the first time since 2007, the yield on three-month government bonds of the United States caught up with the yield on 10-year government bonds. Most experts believe this is a very strong signal of a possible recession in the development of the US economy in the coming years. Serious problems with the maintenance of current growth rates are experiencing now the European Union, China and many other countries. In this case, the incoming statistics indicate about the rise of the negative trends that will maintain a high level of demand for protective assets.
Against this background, more and more important for the market are the US-China trade talks. This week the US delegation will arrive in Beijing for the activation of the negotiation process. This event may be one of the key in the week.
The next five days will be filled with the publication of important economic data, the impact of which on the market increases significantly.
Today the market is awaiting publication of the index of business climate in Germany, from the IFO Institute. In the US, the day will focus on a number of speeches by the Fed, which will give their comments on the economic situation in the country and changes in monetary policy.
On Tuesday, investors will be watching for the publication of statistics by the US construction sector, the consumer confidence index CB and speeches of the FOMC.
On Wednesday, at an event in Frankfurt was a performance of a number of officials from the ECB, including the head, Mario Draghi. In the US, it is worth paying attention to the data on the trade balance.
The central event will be the publication of the final Thursday of US GDP growth in the fourth quarter report 2018.
Completing the trading week will be a large block of statistics on the EU and preliminary data on consumer price inflation in the European Union. In the US, this day should pay attention to the data on expenditure and income of individuals, new home sales and speeches of representatives of the FOMC.
On the chart of gold continues to move up, practicing reversal signal, which was formed at the beginning of the month at the level of 1285.00. The immediate goal in the framework of this reversal formation is the level of 1350.00, but a longer distance can be expected to increase the price to 1370.00. If we consider the situation more locally, it is worth to pay attention to the support of 1310.00, of which it is possible to expect growth of quotations to 1320.00.
Levels of resistance: 1320.00, 1330.00, 1340.00;
Support levels: 1310.00, 1300.00, 1295.00.
The main scenario - an increase in gold prices to 1320.00.
Alternative Scenario - consolidation below 1310.00 and decline to 1300.00.
Fundamental and technical analysis continues to provide signals to continue bullish driving dynamics, so give preference to buying an instrument on the level of 1310.00.
Do not miss: The trading signal forex 5 to 10% profit per month
Based on materials FortFS