Asian markets up big overnight after President Trump and China’s President Xi agreed to meet at the G20 summit later this month in Argentina to discuss trade. President Trump indicated he was pleased with the conversation he had with the Chinese President and that he is optimistic that a deal could be put in place.
The Chinese currency had its best two-day gain in nine months after the news was released that both the U.S. and China are working towards a settlement in the current trade war.
All this news has continued to put pressure on the Dollar helping the price of Gold to advance. In the past fifteen days, over 10 tons of gold have been added to the ETF arena, as investors continue to diversify their portfolios every time the equity market starts a correction to the downside.
Global equity markets are all in positive territory as the Tariff news is released. Also helping equities this morning is the strong jobs report showing in the month of October 250,000 jobs were added. Wall Street had expected an increase of about 195,000. Unemployment now at 3.7 percent and analysts claim that there are now more job openings than trained people to fill them.
The price of Gold poked its head outside the current trading range for a while yesterday as the U.S. dollar lost ground to other world currencies. It seems now the dollar has steadied a bit and the price of spot Gold has dropped back below the $1,235 level, which by the way is at the top end of the current trading range.
For the most part Wall Street traders are not taking any positions at this time as a few want to see the price of Gold break thru the first level of resistance at $1,239.20 and then $1,245.40 before jumping on board. Technical values show no resistance from the $1,245.40 level till the $1,268 level, so a possibility of a strong rally could take place if we can just settle above the second level of resistance.
At this juncture, a strong rally can only occur if some big surprises come out of the midterm elections on Tuesday. A weaker dollar and a significant sell off in equities are the two components needed to get the price of gold to move northward. Otherwise I expect we will stay range bound for the foreseeable future.
Have a wonderful Friday.
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