Spot gold rose slightly to $1,547.50 an ounce in Asia on Wednesday, as China and the United States plan to sign the first phase of a trade deal today. Economies.com, a leading financial news website, analyses the future of gold, silver, oil, euro/dollar, and sterling/dollar.
China and the United States have previously gone through necessary procedures such as legal review, translation, and proofreading, and communicated closely on the signing of the agreement. According to the statement of the Chinese side, through the joint efforts of the economic and trade teams of the two countries, the two sides have reached an agreement on the text of the first stage economic and trade agreement based on the principles of equality and mutual respect.
The signing ceremony will take place at the White House at 11 a.m. Wednesday. About 200 people, including representatives of major U.S. trade groups, will attend the signing ceremony.
US President Donald Trump said in a tweet on December 31 that he will sign a “phase I” trade agreement with China on January 15 while senior Chinese representatives are present at the White House. Mr. Trump also said at the time that he would then travel to Beijing to start “phase two” negotiations.
In a gesture of goodwill, the US has dropped its designation of China as a currency manipulator ahead of a planned first-phase trade agreement between the US and China on January 15. It was seen as a gesture of reconciliation before the deal was signed.
Analysts said it was the details of the agreement that deserved the most attention. Details such as the U.S. agreeing to no more tariffs and China’s agreement to increase purchases of U.S. agricultural products would further ease concerns about global trade and dampen risk aversion, weighing on gold. Otherwise, risk appetite is weakened, making gold stronger.
Gold showed some bullish bias after testing the $1536.50 / oz level earlier on Tuesday. Random indicators have a positive impact.
From the 4-hour chart, EMA 50 puts negative pressure on the gold price, leading us to predict a return to these levels.
If gold falls below $1536.50 / oz, it could fall to the next target of $1519.00 / oz.
Overall, gold is still expected to remain in a bearish trend scenario unless it rebounds above $1,556.70 an ounce and stays above that level.
Silver continued its slide, hitting $17.60 an ounce at one point. It should be noted that silver has completed the construction of the head and shoulder form, which supports the possibility of silver falling below these levels.
If it falls below $17.60 an ounce, that would open the way for silver to test its next target of $16.96.
So unless silver rebounds above $18.38 an ounce and stay above that level, it is still expected to be bearish for some time to come.
WTI crude oil
WTI oil showed a slight bullish bias and rose back above $58.00 / BBL. Meanwhile, the EMA 50 indicator continues to weigh on oil prices, judging from the 4-hour chart. As long as oil stays below $60.90 / BBL, we will remain bearish.
A note of caution is that our first price target for oil is $57.40 / BBL, and once it falls below that level, the next price target looks toward $54.60 / BBL.
Euro/dollar showed a slight bearish bias and tried to move away from the 1.1140 level, which supported expectations that the bearish trend would continue. The primary target is at the 1.1060 level.
Note that the continuation of the euro/dollar bearish trend depends on the exchange rate staying below the 1.1140 and 1.1180 levels.
Pounds per dollar
Unless the pound/dollar breaks through the 1.3150 level, it continues to be expected to remain in a bearish trend in the coming sessions.
A note of caution is that if GBP/USD falls below 1.2920, this will push it to the next target of 1.2736.