Gold Prices Trade Lower on Positive US GDP

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Written By: Angeline Feliciano

Nov 28, 2019, 07:30 GMT 07:30

Gold Prices

Summary:

Gold prices trickled lower yesterday on positive US GDP numbers. However, will the HK rights law spark risk aversion to push XAUUSD higher?

Gold prices traded lower in yesterday’s trading as the preliminary Q3 2019 GDP report top forecasts. XAUUSD closed lower at $1,454.12 from its open price of $1,461.05.

According to the initial reading of the US’ third quarter GDP numbers, the economy grew by 2.1% versus the market consensus of 1.9%. This triggered a demand for the US dollar as it affirms the Fed’s stance that the economy is doing well enough not to warrant further easing.

XAUUSD Outlook

However, it’s worth discussing that US President Donald Trump has signed the Hong Kong rights bill into law. This could possibly be detrimental to the US-China trade deal negotiations as the Chinese have previously warned against this move. There are speculations that China could retaliate by imposing tariffs on US-imported goods. This could then make a trade deal unlikely by this year.

If these worries are confirmed, we could see risk aversion dominate market sentiment and trigger a demand for safe haven assets, including gold.

Gold prices are currently testing resistance at the top of the descending channel (when you connect the highs and lows from November 20) on the hourly time frame.

If XAUUSD closes above today’s Asian session highs, we could see gold prices rally to resistance at its November 26 highs. On the other hand, if the dollar can sustain its gains, XAUUSD could drop to the bottom of the channel around $1,449.95 where it bottomed on November 26.Download our latest quarterly market outlook for our longer-term trade ideas.

Written By: Angeline Feliciano

Angeline Feliciano has been trading Forex for over ten years. She has invaluable experience working in FX education companies like BabyPips.com and Learn to Trade as a trader, currency analyst, trading coach, and presenter. Aside from these roles, she has also created intensive educational content on fundamental analysis which is heavily sought after by retail traders. She has taught hundreds of people how to trade the FX market in the Philippines and in Australia. When she is not trading, you can find her in the gym lifting weights.