Gold prices moved lower on Monday as US yields moved higher across the interest rate curve, which helped buoy the greenback. The rise in the value of the US dollar paved the way for lower gold prices. Despite the need for a further extension of a Brexit, the pound rallied into the close of the day, as there appears to be many who believe that Johnson will get parliament to eventually vote for a bill he is sponsoring. There appears to be progressing with a deal between the US and China. China’s Vice Premier confirmed progress in trade talks with the US, though no date has been set to resume negotiations before a formal agreement between Trump and Xi in November.
Trade gold with FXTM
Gold prices moved lower and Monday and are poised to test support near an upward sloping trend line that comes in near 1,477. Additional support is seen near the 100-day moving average at 1.455. Resistance is seen near the 10-day moving average at 1,492, and then a downward sloping trend line that comes in near 1,509. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum is negative to neutral. The MACD histogram is printing in the red with a flat trajectory that points to consolidation.
Brexit is in the Spot Light
Brexit negotiations continues to capture the attention of the markets. UK PM Boris Johnson will attempt to push through bills that will allow him to move to a hard Brexit. The rally in the pound on Monday likely provides a 50-50 shot that Johnson will get his agreement with the EU over the finish line. The EU is seen likely to grant the UK some extension.
This article was originally posted on FX Empire
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