Gold closed with a 0.45% decline on Thursday amid stronger dollar, which makes the precious metal more expensive for investors.
The American dollar received the main support after the publication of preliminary data on US GDP growth in the fourth quarter of 2018. According to the report, GDP growth slowed down from 3.4% to 2.6% compared to the previous quarter, which was generally in line with experts' expectations. But the GDP deflator turned out to be higher than the forecast, 2.0% versus 1.7%. On these data, the dollar began to actively strengthen, since according to many investors, such growth rates allow the Fed to continue the process of moderate rate increases. These assumptions were quickly refuted by Jerome Powell, who once again made a speech this week. On Thursday, he once again noted the good state of the US economy, but he complained about the growing risks that are forcing the Fed to temporarily suspend the rate hike cycle. Among the most significant threats to the US economy, he attributed the slowdown in economic growth in Europe and in China, as well as the political uncertainty associated with the US-China trade negotiations, and Brexit.
But on the whole, stock market players positively assessed the news on Thursday and the major US indices ended the trading day with growth, which also had a negative impact on the dynamics of gold.
Today, at the Asian trading session, new statistics from China were the focus for investors. According to Caixin, the manufacturing sector PMI recovered slightly from 48.3 to 49.9 points, but remains below 50, indicating a slowdown in activity.
Today in the European session, the focus will be a large block of statistics from the EU. First of all, you should pay attention to the publication of data on the labor market in Germany and the EU, preliminary data on the consumer price index in the EU, as well as data on the PMI of the manufacturing sector.
In the USA, among the most significant statistics data are the publications of a reports on personal consumption expenditures and the manufacturing sector PMI from ISM.
The chart demonstrates that correction continues to gain momentum. The support at the levels of 1325.00 and 1315.00 was broken that opens new perspectives for the development of a deeper correctional wave. Now the target is the range of 1303.00-1305.00, the breakdown of which will actually mean a breakdown of the global bullish trend.
Resistance Levels: 1316.00, 1330.00, 1335.00;
Support Levels: 1303.00, 1305.00, 1310.00.
The main scenario is a decline to the range of 1303.00-1305.00.
An alternative scenario - fixing above 1316.00 and rising to 1320.00.
The correctional wave continues to develop on the market, therefore, short-term preference is given to sales that are worth looking for in the area of 1316.00.
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