Gold declined in price amid positive dynamics in stock indices. Investors' willingness to risk increased after the publication of economic statistics from China and Trump's statements about the gradual opening of the economy.
At the same time, experts do not share the optimism of investors, both regarding statistics from China and Trump's plans to mitigate quarantine measures.
According to the report presented today, the Chinese economy in the 1st quarter of 2020 fell by 6.8%, with a forecast of -6.5%. Industrial production in March decreased by 1.1%, compared with the same period last year. Experts expected a decrease of 7.3%. The National Bureau of Statistics acknowledged that problems in the global economy significantly impede recovery in the PRC economy. Many statistics indicate a rather difficult economic situation in the country. So, in March, retail sales fell by 15.8% (forecast -8%), investment in fixed assets fell by 16%, home sales fell by 22.8%.
Experts assess Trump's plans to mitigate quarantine measures as premature. The epidemiological situation in the country remains difficult and for a full-fledged launch of the economy it will take much more time than the White House administration plans.
However, as long as cautious optimism prevails in the market, gold and other defensive assets will remain under pressure.
There is no important news in the economic calendar today. The dynamics of gold will depend on the situation on the stock market and the fluctuations of the USD.
Regarding the chart, the price tested the level of 1688.00. This is a strong support from which we can expect the formation of a retreat in the direction of 1710.00, with possible further downward movement.
Resistance Levels: 1710.00, 1725.00, 1740.00;
Support Levels: 1688.00, 1645.00, 1610.00.
The main scenario - an increase to 1710.00 and further downward movement.
An alternative scenario - a breakdown of support at the level of 1688.00 and a decline in the direction of 1645.00.
The current fundamental outlook is moderately negative. Currently we prioritize shorts. Entry points are to be sought after when the prices roll back to the area of 1710.00.
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