Gold continues to trade in the area of new annual lows, remaining under pressure from a number of important fundamental factors.
First, the demand for safe assets, to which the yellow metal belongs, remains low against the background of high investor risk appetite. On the eve, important statistics on China were published, which indicate the recovery of one of the largest economies in the world, which caused an increase in major stock indices. The interest in risky assets are also supported by the new optimistic statements of the White House on the progress of the US-China trade negotiations. Yesterday it became known that the parties made an approximate schedule of the next meetings, to speed up the process of negotiating a trade agreement. According to the information of the American side, the agreement may be signed at the end of May, the beginning of June. As part of the schedule, the US delegation will arrive in Beijing for talks in the week from April 29 to May 5. The delegation of China will visit USA from May 6 to 12.
The trade war and a significant slowdown in China’s economic growth have had a strong impact on the entire global economy, so investors are now hoping that resolving this conflict will help to improve situations in all regions of the world, from Europe and the United States, to developing economies that are closely tied to China.
The second important factor of pressure on gold remains the US dollar, which continues to hold its position, despite the presence of certain negative factors. Against this background, the yellow metal remains a rather expensive asset for foreign investors, forcing them to look for more attractive alternatives.
Today in Europe and the United States will be published preliminary data on the PMI sectors of production and services, but the central event of the day should be a report on retail sales in the United States. After a decline of 0.2% in February, experts expect growth of 0.9% in March, which could provide strong support to the dollar.
Also, do not forget that today is the last active trading day in the US and Europe, tomorrow financial markets will be closed (Good Friday), which may cause some corrections in the course of today's trading. Many investors will fix their positions before a long weekend.
On the chart, bearish signals still prevail, indicating the final formation of a medium-term reversal for this instrument. The price without any problems was able to push through the key support at 1276.50, indicating the further priority of the price movement. Locally, one can still expect the formation of short-term correctional movements, but over a longer distance, the priority remains with a decrease in quotations in the direction of the level of 1235.00.
Resistance Levels: 1280.00, 1283.50, 1287.50;
Support levels: 1270.50, 1263.00, 1260.00.
The main scenario is a correction to 1283.50 and a new wave of decline.
An alternative scenario - the development of a bearish wave from current levels.
The overall background for gold remains negative. On the chart there are no signals that could indicate stop of the price movement. Intra-day preference is given to shorts that should be considered near the level of 1283.50.