The price of Gold extended downside movement on Monday, dragging the value of the precious metal to less than $1145 an ounce following the release of some key economic data from China. The technical bias remains bearish because of a Lower Low and Lower High in the ongoing wave.
As of this writing, the precious metal is being traded around $1140 an ounce. A support may be noted near $1137, the 61.8% fib level ahead of $1125, the 76.4% fib level and then $1104, the swing low of the last major downside move as demonstrated in the following chart.
On the upside, the yellow metal is expected to face a hurdle near 1148.00, the 50% fib level ahead of 1158, the 61.8% fib level and then $1200, the psychological number. The technical bias will remain bearish as long as the $1162 resistance area is intact.
China’s Manufacturing Data
China’s factory activity fell for an eighth straight month in October but at a slower pace as export orders flickered into life, a private survey showed on Monday, pointing to continued sluggishness in the world’s second-largest economy.
The Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) edged up to 48.3 in October from 47.2 in September.
The highest reading since June 2015 will likely fuel hopes that the industry’s long slump may be bottoming out. But it remained well below the 50 mark, signifying a further contraction that will raise doubts about whether China’s economy could see a modest pick-up in the fourth quarter.
Considering the overall technical and fundamental outlook, buying the precious metal around $1137 in the short term could be a good strategy.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT