Top Trade Setups in Forex - US Building Permits in Highlights
New York (Dec 17) XAU/USD - Sideways Sessions Continues. Gold prices closed at $1475.90 after placing a high of $1479.88 and a low of $1473.12. Overall the movement for gold remained bullish throughout the day.
Gold prices remained steady on Monday after the announcement of the US-China interim trade deal last week. Gold has been under high demand this year and almost showed a 17% increase in its prices this year amid increased global uncertainties surrounding the US-China trade war.
Headlines about the phase-one deal have been moving in the market for many months but going back & forth due to the difference of opinions of both sides. So, many investors have already priced on this phase-one deal agreement, and that was the reason which holds any drastic change in gold prices when the news about agreeing on terms of the phase-one deal came in last week.
In addition, the terms & conditions of the interim trade deal are yet to be published for the public, and traders don't know what has been finalized in the deal. This is also another reason that gold prices have not seen a massive sell-off.
The date on which this deal would be signed by the U.S. & China's officials is also not revealed. So, there are many uncertainties left to be cleared out for creating a drastic change in the prices of safe-haven assets. Furthermore, on Sunday, the U.S. trade representative Robert Lighthizer said that U.S. exports to China would nearly double over the next two years as part of the phase-one deal.
According to the agreement, the U.S. tariffs on $160 Billion of Chinese imports were suspended. The U.S. also agreed to split the tariffs to 7.5% on $120 Billion worth of Chinese goods.
However, the gold prices will not slide as global growth is not yet positive, and there are still some risks.
On the other hand, gold prices were also supported by the weakened U.S. dollar on Monday. At 18:30 GMT, the Empire State Manufacturing Index from the United States was published, which showed a decline for the month of December. It came in as 3.5 against the expectations of 5.1 and weighed on the U.S. dollar, which supported gold prices on Monday.
The closely watched Flash Manufacturing Purchasing Manager's Index (PMI) from the United States was published at 19:45 GMT, and it came as expected for December as 52.5. The Flash Services PMI showed a minor growth from expectations when released as 52.2 against forecasted 52.0.
However, at 20:00 GMT, the NAHB Housing Market Index from the U.S. showed a growth of 76 for December from the expected 70 and supported the U.S. dollar.
FXstreet
