- Gold prices were benefiting on Tuesday following a default in the greenback’s impressive bull trend and consecutive days of gains that came to an abrupt end today.
- Gold is currently trading at 1310, below the session highs of $1,312.8/oz2 and up from $1,308.24/oz.
The greenback fell to the 23.6% Fibo retracement of the late Jan rally as the market corrects, despite US yields which remain elevated, with the 10-year yield topping at 2.69% from a low of 2.6490% while U.S. stocks added to the recent gains. News that Sino/U.S. trade talks are making progress and a deal in principle between the U.S. Republican and Democrats over ‘the wall’, abating fears of another U.S. government shutdown. Nevertheless, gold settled higher on Tuesday, with the April gold contract adding $2.10, or 0.2%, to settle at $1,314/oz.
As for data, analysts at ANZ Bank explained that the US Job Openings (JOLTS) hit a new record high in December, coming in at 7.34m following an upwardly revised 7.17m in November, and indicating ongoing strength in jobs demand and momentum in non-farm payrolls creation:
“All the while, US household debt rose $32bn in Q4 to $13.54tn, exceeding the previous peak of $12.68tn in Q3 2008 and up 21.4% from the post-GFC trough in 2013 Q2. While the US labour market remains strong, the sharp fall in NFIB Small Business Optimism to 101.2 in January (its lowest reading since November 2016 and below market expectations) suggests risks are heightened. That said, a February rebound in small business sentiment could be on the cards given the US government shutdown and late-2018 stock market wobble likely weighed.”
Gold has rebounded following a decline that came after the 30th Jan doji was printed, with the decline down to 1308 the low. The price has been held up ahead of the 1,300 psychological level which guards the 1297 9th Jan highs before the 23.6% Fibo retracement down at 1,287 and then critical support area around 1276. Bulls can now target territory towards the rising channel through the 23.6% Fibo of the 23rd Jan lows to recent highs of 1326 at 1314.