Gold price remains in the red zone on Monday amid a prevailing risky attitude before the formal signing of an interim trade agreement between the US and China. Gold is a traditional protective asset, therefore, in the current situation on the market, the demand for gold is decreasing.
According to the official statements, Chinese Deputy Prime Minister Liu He will arrive in Washington on January 13th. The signing of the agreement is scheduled for Wednesday, January 15th. Investors hope that a trade agreement between the US and China will help improve the situation in international trade and the economy.
The demand for gold is also affected by the situation in the Middle East. The US and Iran adhere to milder rhetoric, refraining from new military threats. The authorities of the Islamic Republic are now more occupied with domestic problems. After Iran officially pleaded guilty for the downed Boeing, mass protests broke out in the country.
On Monday, there is no news in the economic calendar that could affect gold price, so the main impact on trading will be provided by the situation on the stock exchanges and geopolitical news.
Regarding the chart, the price tested a strong local resistance level of 1560.00. The bulls did not manage to gain a foothold above this mark, therefore, as a priority, we consider a scenario of a decline in the direction of 1542.00. In the medium term, we can expect a decrease towards 1530.00.
Resistance Levels: 1560.00, 1573.00, 1585.00;
Support Levels: 1542.00, 1530.00, 1515.00.
The main scenario - a decline towards 1542.00.
An alternative scenario - consolidation above the level of 1560.00 and growth towards 1573.00.
The fundamental outlook is moderately negative. The downward movement remains a priority, therefore, within the daily framework, we are considering shorts from the level of 1560.00.
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