Gold prices opened the week’s trading on a notable increase of 1.5%, hitting an all-time high of $4085 per ounce. The yellow metal is also on track to extend its gains for a second consecutive session.
Gold is currently trading within a bullish channel, hovering near the first weekly resistance level at $4089. If gold manages to hold above the aforesaid level, it could be a strong signal that it will continue to break records towards $4162.
On the downside, if gold fails to settle above the first weekly resistance level at $4089, it will lose positive momentum and may retest the weekly pivot point at $3986. A close below the pivot point could trigger a decline toward $3,914, followed by $3,811.
On the economic front, President Trump’s latest statements on U.S trade relations with China have continued to capture investors’ attention at the start of the new trading week. Over the weekend, Trump said that everything would be “fine”, and that Washington was not seeking to “hurt” China, a tone that seemed less harsh than that adopted by the president late last week.
These comments come after tensions escalated late last week, when Trump renewed market concerns about a trade war between the world’s two largest economies by suggesting he might impose an additional 100% tariff on goods from China.
Trump also warned of new US export controls on “all critical software” by November 1 and raised some doubts about a high-level meeting with Chinese President Xi Jinping in South Korea later this month.
On Tuesday, the focus will shift to Federal Reserve Chair Jerome Powell’s upcoming speech this week, as markets seek fresh signals on the Fed’s next policy move amid heightened uncertainty.
On the economic agenda, investors will carefully monitor U.S. producer price index for September, where analysts expect annual inflation to fall to 2.5% from a previous of 2.6%.
Markets are also awaiting U.S retail sales data, with analysts expecting sales volume to drop by 0.4% in September, compared to a 0.6% soar in August.
Finally, the U.S. jobless claims report is likely to grab attention given the postponement of the non-farm payrolls report due to the U.S. government shutdown. Initial jobless claims may have risen to 223,000 last week from 218,000 a week before, according to median forecast.