The price of gold continues to decline amid a stronger dollar and a decline in investor’s interest in defensive assets.
The US dollar was supported by a budget agreement between House Democrats and President Trump. Also a positive impact on the dollar had a message about the resumption of face-to-face negotiations between the United States and China. For the same reason, the main stock indices of the USA and Europe also show good growth, which is always accompanied by a decrease in demand for defensive assets such as gold and the Japanese yen.
Today, in addition to geopolitical news, investors will focus on preliminary data on the PMI of the services and manufacturing sector in the United States and Europe. Also the US is expected to publish data on sales of new housing. Yesterday, data on sales in the secondary housing market were significantly worse than market expectations, so if today's report again falls below the forecast, the dollar may be locally under pressure. In this case, after three days of decline, gold may complete trading in the green zone.
On the chart, the bulls have so far managed to keep the price above the mark of 1415.00, while maintaining good chances of resuming upward movement. The long-term trend for this instrument remains bullish. But, if the price cannot be kept above 1415.00, the local priority will shift towards the scenario with the price decrease towards 1400.00.
Resistance Levels: 1428.00, 1438.00, 1450.00;
Support levels: 1415.00, 1400.00, 1383.00.
The main scenario - growth to 1438.00.
An alternative scenario - the breakdown of support at 1415.00 and a decline to 1400.00.
The news background for gold remains moderately negative, but the global trend for this instrument remains bullish. Therefore, within the day, we give preference to longs that should be considered at the levels of 1415.00 and 1400.00.