Gold Price Today
Gold prices traded higher despite the announcement from American policymakers that the US and China have agreed on a phase one deal. XAUUSD opened at $1,466.06 and traded higher to finish the day at $1,474.94.
On Friday, US Trade Representative Robert Lighthizer announced that the US and China have come into terms with a phase one deal. This news sparked risk appetite during the New York session and caused some volatility on gold prices. According to the US policymaker, existing tariffs on Chinese goods will be reduced. On top of that, the US cancelled the additional levies which were set to take effect last Sunday, December 15.
China has reportedly agreed to a fair share of purchases from the US in exchange for more lax tariffs. The country has been asked to buy up to 200 billion USD-worth of agricultural, manufactured, and energy products until 2021.
While markets previously rallied on speculations of a trade deal, it seems that the announcement made on Friday raised more questions than answers. For one, China has been quiet about a phase one deal. They have not yet confirmed that an agreement between the two countries has been reached. Contradicting statements from the two countries will likely cause risk aversion and boost demand for the safe haven, gold.
XAUUSD may also take its cue from the reports we have scheduled from the US today. At 2:45 pm GMT, the US services PMI is estimated at 52.0 for November. Meanwhile the manufacturing PMI is expected at 52.6.
Read our Best Trading Ideas for 2020.
On the daily time frame, we can see that gold has been consolidating. In fact, it has been trading between $1,444.11 and $1,485.96 since early November. The precious metal also looks to be testing the falling trend line from connecting the lower highs of September 4, October 25, November 1, and December 12. If sellers dominate today’s trading, we could see a reversal candle materialize around $1,480.00. A doji or shooting star could indicate that sellers are priming for a move lower. The near-term support is at the November lows of XAUUSD at $1,444.11. If this level does not hold, the next support is around $1,384.70 where the precious metal opened for July 2019.
On the other hand, a strong bullish close above the range at $1,485.96 could mean that XAUUSD may soon rally to its October 2019 highs around $1,514.20.