XAUUSD Gold Report: US-China Trade War And Risk Appetite

Highlights of upcoming events which could affect Gold:

December 12 – ECB decision: The ECB is not expected to make changes to its monetary policy. The wait-and-see policy and emphasis on financial support can be expected to continue. It will not have a significant impact on gold.

December 12 – UK elections: Polls suggest that the Conservative Party will win the UK elections by increasing the number of votes and the number of seats in Parliament. The fact that the Conservative Party wins the elections with a majority, Boris Johnson is expected to activate the Brexit plan, which he had previously failed to approve in Parliament. And this will increase the possibility that Brexit will take place on January 30th. This would help to eliminate a significant global uncertainty. GOLD NEGATIVE

But; After the realization of Brexit, the trade negotiations between the UK and the EU will create new uncertainties. GOLD POSITIVE

December 15 – US-China tariffs: The phase-1 agreement between the US and China, which is expected to be signed in mid-November, has not signed yet and tensions are rising due to the Hong Kong protests between the US and China. As the economic slowdown in China becomes more evident, China continues to take significant steps to ensure the agreement, as in the case of copyright, and to ensure that the agreement is achieved.

Some analysts think the signing of the deal could be by the end of the year.

As it is known, the US decided to impose a 10% import tax on the $ 156 billion consumers product imported from China but postponed it to December 15. Whether these taxes will come into force will be the main determinant of the negotiations. If the US begins to impose these taxes, this could lead to a break in negotiations and serious disruption of risk appetite on a global scale.- GOLD POSITIVE –

The continuation of the process may even raise the expectations of further interest rates cuts from the Fed. This may trigger a new upward trend in Gold. – GOLD POSITIVE-

Although the global economy signals a return from the bottom and major central banks do not signal additional easing policies, this outlook may be reversed by the failure of trade negotiations between the US and China. Therefore, the main determinants of gold prices will continue to be US-China developments in the near future.

Technically:

On the weekly chart:

• As seen on the chart, Gold is making its technical correction.

• As long as it stays above USD 1,376 in the long term, we consider the pullbacks as an opportunity to buy. Daily closing above 1508 would be the confirmation of Bullish trend continuation to add long positions. Targets are 1586 1600 & 1652.

• If XAUUSD makes daily closing below 1.445 $, it is likely to test 1437 1421 and 1406.

Smaller Charts:

Bullish Bat pattern and ABCD 1.27 Ext. are working. Price reached the TP2 Level. However, the upside is capped by SMA200 H4 and SMA100 D1 at 1.474-1480.

Two emerging harmonic patterns can be used as a selling opportunity.

Summary: 

Longer-Term Gold  Buy Levels: 1402 & 1508.  Targets: 1586 1600 1652

Shorter Term Selling Opportunities: Pullbacks to 1475- 1486 and Daily Closing Below 1437. Targets 1421 1406 1380