On Monday, uncertainty related to trade maintained the dollar on lower levels. The overall trend for the precious metal took a diversion followed broad strength in the dollar. China agreed to send his representative for talks with US on 11th this month. China warned of improbability in international markets from any "decoupling" of China and the US, as few comments showed that, Trump administration was bearing in mind delisting Chinese companies from U.S. stock exchanges. On weekly note, Gold opened at 37550 and traded on lower side. On Tuesday Gold made low of 36771 which was low of almost 2 months then after recover from there. Gold prices showed strength as weaker than anticipated US economic data reinforced global economic slowdown. US manufacturing activity tumbled to a more than 10-year low in September as remaining trade pressures weighed on exports, on the other hand private payrolls data progress in US reduced in September presenting weaker than anticipated hiring by US private employers. Gold prices extended gains on Thursday after a weak service sector survey deepened the market concerns over economic growth. Data showed manufacturing PMI number fallen to a 10-year low also the private payrolls growth in US showed weaker than expected hiring by US Private employers. Slower growth in US service sector activity slowed to a three year low in September, all this is supporting the gold prices. Nonfarm payrolls number which released Friday was weaker than expected and unemployment data announced was positive which lead to increase in precious metal prices even higher.
Major Concern Next Week
China is about to send its top trade negotiator Vice Premier Liu to Washington any time after 7th October 2019. It will be 13th round of talk aimed to resolve a trade war. Apart from that FOMC Meeting, monthly CPI data and monthly core CPI data will keep investor busy this week.
Weekly Trading Strategy
As far as next week is concern Gold is trading near its 50 days EMA. Gold seems like to trade in the range of 37460 to 38495 levels. The level of 37710 which can act as major support apart from that RSI is trading aroung 50. And on daily chart ADX is trading around 18 which might indicate that Gold should lie in between these levels.
Energy Crude prices saw a brief a fall throughout the week. OPEC data showed that production for OPEC countries fell for the third quarter as OPEC's output fell to the lowest in eight years in September at 28.9 Mbpd, down 750,000bpd from August's revised figure and the lowest monthly total since 2011. Energy Crude prices fell to 2-months low after EIA report which showed stockpiles posting their largest gain since May and crude oil inventory report showed refiners slowed output, the first time since mid-August but the build was driven as demand eased. Inventories data showed an inventory build of 3.1Mbpd compared to expectation for relatively modest build. Crude supplies from OPEC’s oil exporters fell to their lowest level since Jan 2017 after an attack on two of Saudi Arabia’s largest oil processing facilities halted more than half the country’s oil production. The worries of recession are once again erupted in markets after bearish data of U.S. ISM that economic recession is appearing more likely. Saudi Arabia’s recent success at restoring lost oil production which allowed markets to look past geopolitical risk and has removed some volatility from price movements. But that doesn’t meant that supply risks have gone away as the sudden eruption of protests in Iraq, and the ensuing crackdown, has raised the prospect of further instability in a key oil-producing country in Middle East.
Major Concern Next Week
China US 13th round of trade talks will take place at Washington next week. Saudi Arabia’s recently succeed to restore their oil production at the earlier levels which also permitted markets to look past geopolitical risk and has removed some instability from price actions.
Crude oil is currently trading around 2 month low and trading below 50 EMA. As of now on the charts there is no positive signs for it to bounce back. RSI is trading around 38.42 levels and ADX is trading around 14.28 Levels. Crude oil is likely to trade in the range of 3593-3971.