During Friday, Gold regained some of its strength and traded over the $1200 per ounce level as the US NFP figure came out way below market expectations and thus weakened the USD.

The report released a figure of 134K jobs created in September but the forecast being at 185K leaved market participants puzzled with the outcome not even close.

Market participants and various analysts pointed at Hurricane Florence which formed on August 31, 2018 and dissipated on September 19, 2018 hitting mostly Carolina and could have hurt the labor market.

On the contrary, Gold dropped on Monday, as the U.S. dollar regained strength and multiyear highs in Treasury yields plunged prices for the shiny metal to their lowest settlement in more than week.

During Tuesday, the IMF lowered its economic view for the U.S., China, the euro zone and the UK, stating it now expects the global economy to expand with a slower pace by just 3.7% in 2018 and 2019, below the 3.9% forecasted initially.

Gold prices gained support upon the news and made a small comeback after the drop it went through on Monday.

Overall, the fact remains that most investors are more interested in US dollar assets because of the strong financial results the US economy has displayed until know.

To confirm this U.S. President Donald Trump made it clear he is unhappy with the FED raising rates as inflation has been seen dropping somewhat.

The US economy is in fact growing and strengthening very fast, and FED Chairman Jerome Powell with his team are enacting a steady path for rate hikes to slow the procedure down.

In Turkey, President Erdogan wants to buy more gold to diversify away from the U.S. dollar, something that the Turkish Central Bank has been doing for months.

It must be noted, with all the economic turmoil happening in Turkey, gold priced in Turkish lira became roughly 62% more expensive due to the significant weakening of the Turkish Lira against the USD exchange rate.

The latest surge in prices has had the contrary effect on consumer buying of gold in the country.

Moreover, Bullion, traditionally used as a prudent store of value during political and economic uncertainty, could be looking to break away from the oversold trend line incepted since August, especially as the U.S China trade war is unfolding.

On Monday, Mike Pompeo’s visit to China was not the most of productive and positive ones between the countries.

The Chinese mentioned many matters including the escalating trade friction toward China characterizing it as a direct attack that deteriorates good relationships.

In our opinion, the trade conflict is far from over and the Chinese could be undergoing an in depth investigation in order to promptly retaliate accordingly.

We believe a non-anticipated retaliation act could be an important reason for Gold to jump-start its return to higher levels.

XAUUSD 1 Hour chart

Since the past Monday, the 8th of October Gold has been trading in a sideways manner between the 1191.08 (R1) resistance level and the 1184.90 (S1) support level.

Both these price levels have been tested but have not been broken until now in the current week.

In our opinion, if the precious metal breaks one of these price levels then it could be an indication of the trade pattern changing.

If the 1191.08 (R1) resistance level is surpassed then we may see the next level being 1197.27 (R2) resistance barrier.

Then again if the 1200 round level is passed then our 1202.25 (R3) resistance level could be the next stop.

If the 1184.90 (S1) support level is broken then the metal could be aiming for 1180.00 (S2) support level.

If that level is broken then 1173.90 (R3) resistance level comes into play as that level was reached in the previous August midmonth.



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