Gold prices failed to sustain Friday’s upside break of 100-day Exponential Moving Average (EMA) while taking rounds to $1,462 amid Monday’s Asian session. That said, the bullion also seems to ignore the recent trade negative news from Axios.
Although the Wall Street Journal (WSJ) cited diplomats from the United States (US) and China while conveying no side effects on the phase-one talks, recent reports from Axios suggest otherwise. The news says that the deal is now stalled because of the Hong Kong legislation and may only happen at "year-end at the earliest." While disagreement over the rollback of the US tariffs and China’s guarantee on the agricultural import was reported as the main roadblocks, the US interference in the Hong Kong issue is likely an underlying reason that is up for grabs.
The market seems to wait for confirmation after the recently released data over the weekend, from China, showed spread optimism among the global market watchers. With this, the US 10-year treasury yields stay positive around 1.79%.
The yellow metal’s lack of response could also be attributed to the US dollar’s (USD) broad strength. With the US Federal Reserve (Fed) officials entering the blackout period while holding a neutral policy bias, coupled with overall positive data, keeps the greenback traders’ optimism intact.
Looking forward, traders will mostly concentrate on the month-start data from the US for immediate direction while trade/political headlines could keep dominating the major sentiment. Among the scheduled statistics, the US ISM Manufacturing Purchasing Manager Index (PMI) will be the key. “The US data calendar is worth watching. The manufacturing ISM survey plunged from late 2018 to a low of 47.8 in Sep 2019. The index recovered to 48.3 in Oct and consensus is 49.5 for Nov. Oct construction spending is due, seen up 0.4% MoM. Surprises in this series often produce changes to GDP forecast,” says Westpac.