Gold climbs to 9-month high as investors search for cues

Gold has posted gains in the Monday session. In North American trade, the spot price for one ounce of gold is $1326.49, up 0.41% on the day. Gold is currently at its highest level since May 2018. In the U.S., banks are closed for a holiday and there are no U.S. events.

After strong gains of 3.0% in January, gold prices have steadied in February, as risk appetite has improved. Investors are optimistic that the trade war between the U.S. and China is easing. A third round of talks ended in Beijing on Thursday, with Treasury Secretary Mnuchin calling the negotiations “productive”. Still, with no breakthrough in the offing, the big question is will President Trump suspend the March 1 deadline to impose new tariffs on China. The U.S. has threatened to raise tariffs on some $200 billion of Chinese goods from 10% to 25%, but Trump has said he could let the deadline pass if there is progress in the talks. If there is a breakthrough in the talks, risk appetite could jump and send safe-haven gold downwards.

There are concerns about the strength of the U.S. economy, after soft consumer data in January. Retail sales and core retail sales showed sharp contraction, and these numbers came on the heels of soft inflation indicators. Inflation remains low, despite a strong labor market. CPI showed no change in January and has failed to post a gain since November. Core CPI has recorded weak gains of 0.2% for four successive months. On an annualized basis, CPI gained 1.6% in January, the weakest year-over-year gain since mid-2017. The soft inflation numbers were a result of low energy prices, which fell 3.1% in January as oil prices remain under pressure.

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Slow Start to Trading Week

XAU/USD Fundamentals

Monday (February 18)

• There are no U.S. events

*All release times are EST

*Key events are in bold

XAU/USD for Monday, February 18, 2019

XAU/USD February 18 at 12:00 EST

Open: 1321.05 High: 1327.60 Low: 1320.68 Close: 1326.27

XAU/USD Technical

XAU/USD posted slight gains in the Asian session. The pair dipped in European trade but then reversed directions and posted gains. XAU/USD is showing little movement in North American trade

• 1306 is providing support
• 1326 is the next resistance line. It is under pressure
• Current range: 1306 to 1326
  

Further levels in both directions:

• Below: 1306, 1284, 1261 and 1236
• Above: 1326, 1344 and 1365

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