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Gold slips to 5-week low on U.S-China optimism

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Gold has declined for three successive days, and has again recorded losses in the Monday session. In the North American session, the spot price for one ounce of gold is $1288.58, down 0.37% on the day. March has been rough, with gold prices down 1.8%, and the metal has dropped to its lowest level since late January.

Growing risk appetite has been bad news for gold, as the safe-haven asset thrives at periods of uncertainty and handwringing. Investors are increasingly confident that the U.S and China will reach a deal on their trade dispute, which has rocked the global economy. If the positive momentum continues, President Trump and Chinese President Xi could sign a trade agreement in late March. Still, it’s unclear what the agreement will look like, as the sides have been very tight-lipped. Investors will be most concerned as to whether U.S. tariffs on Chinese products would be eliminated immediately or phased out over time. If speculation rises that a breakthrough is imminent, gold will continue to look less unattractive to investors open to risk.

In the U.S., the week ended on a sour note. Personal Spending declined 0.5%, its first decline in almost three years. The ISM Manufacturing PMI fell to 54.2, short of the estimate of 55.6 points. As well, UoM consumer sentiment improved to 93.8, but still missed the forecast of 95.8 points. The focus this week will be on employment numbers, starting with ADP nonfarm payrolls on Wednesday.

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XAU/USD Fundamentals

Monday (March 4)

  • 10:00 U.S. Construction Spending. Estimate 0.2%. Actual 0.2%

Tuesday (March 5)

  • 10:00 US ISM Non-Manufacturing PMI. Estimate 57.4

*All release times are EST

*Key events are in bold

XAU/USD for Monday, March 4, 2019

XAU/USD March 4 at 12:10 EST

Open: 1293.31 High: 1297.12 Low: 1382.95 Close: 1288.58

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1243 1261 1284 1306 1326 1344

XAU/USD posted slight losses in the Asian session. The pair made considerable gains in European trade. The pair is down sharply in North American trade

  • 1285 is providing support
  • 1306 is the next resistance line
  • Current range: 1284 to 1306

Further levels in both directions:

  • Below: 1284, 1261 and 1243
  • Above: 1306, 1326, 1344 and 1365

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