On Wednesday, global stock indices are rising for the second day in a row, although October will be completed with significant losses. In October, the DJIA lost 6%, S&P500 - 8%, and the Nasdaq - 11%.
European and Asian indices in October suffered the strongest losses, however, most of all investors are worried about the American markets, where active sales were also observed. Market participants focused on concerns about trade conflicts between the United States and China and the Fed's harsh rhetoric about further raising interest rates.
Investors are waiting for ADP data on jobs in the US private sector. The forecast is expected to increase by 189,000 employees, against +230,000 in September. On Friday, official data from the Ministry of Labor on Employment for October will be published. In general, strong data are expected to help investors see the strength of the American economy and the stability of the labor market. This, in turn, will give a positive impetus to US stock indexes, as well as positively affect the dollar quotes.
If the data on the labor market is confirmed or will be better than the forecast, the dollar will continue to strengthen, which could adversely affect the gold quotes.
Gold and dollar tend to move in opposite directions. In the face of an increase in interest rates, as a rule, the investment attractiveness of the dollar increases, and gold - falls.
Recently, gold prices have risen due to the influence of a number of fundamental factors.
The overall trend of gold, as before, remains bearish, despite the fact that since the beginning of the month the XAU / USD pair has risen by almost 4% to the mark of 1240.00 dollars per ounce. At the beginning of the US trading session, the XAU / USD pair is trading near the mark of 1217.00.
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Support and Resistance Levels
Corrective XAU / USD growth, provoked at the beginning of the month by falling stock markets, seems to have ended. Having tested a strong resistance level of 1238.00 (ЕМА144 on the daily chart), above which the key resistance level of 1248.00 is located (ЕМА200 on the daily chart and the Fibonacci level 50% of the correction to the decline wave since July 2016), XAU / USD has been decreasing for the third day in a row.
Breakdown of support levels of 1220.00 (Fibonacci 38.2%), 1215.00 (EMA200 on the 4-hour chart, EMA50 on the daily chart) will return XAU / USD to the global downward trend that began in October 2012.
Breaking the resistance level of 1248.00 would increase the risk of breaking the bearish trend. Nevertheless, long-term downward dynamics prevails. In the long run below the level of 1215.00 preferred short positions.
Support Levels: 1215.00, 1207.00, 1200.00, 1185.00, 1171.00, 1160.00, 1128.00, 1085.00, 1050.00
Resistance Levels: 1220.00, 1226.00, 1238.00, 1248.00, 1260.00, 1266.00, 1277.00
Trading Scenarios
Sell Stop 1213.00. Stop Loss 1222.00. Take-Profit 1207.00, 1200.00, 1185.00, 1171.00, 1160.00
Buy Stop 1222.00. Stop Loss 1213.00. Take-Profit 1226.00, 1238.00, 1248.00
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