Gold: Sidelined after biggest daily decline in four weeks
- Gold registered its biggest single-day drop in four weeks on Friday.
- Markets do not expect the Fed to cut rates in 2020.
- China's exports to the US fell by 23% in November.
- China's data may embolden President Trump to take more aggressive measures.
Gold is lacking a clear directional bias in Asia, having registered its biggest single-day decline in four weeks on Friday.
The yellow metal is currently changing hands at $1,460 per Oz. Prices fell 1.05% on Friday. A bigger loss was last registered on Nov. 7, when prices had dropped by 1.46%.
Fed to stand pat in 2020
Traders priced out prospects of a 25 basis point rate cut by the Federal Reserve (Fed) next year following Friday's blow out Nonfarm payrolls report.
As a result, the yellow metal nosedived from $1,480 to $1,460 and now appears on track to extend losses to support at $1,450 (Nov. 26 low).
China's exports to the US fell by 23% in November, the biggest drop since February and the twelfth straight monthly decline, according to official data released on Saturday.
The sustained drop in China's exports to the US may embolden the Trump administration to take more aggressive steps in the future. Note that another round of US tariffs on Chinese goods is due next Sunday.
As a result, gold may find love, especially if equities and Treasury yields feel the pull of gravity. Currently, the futures on the S&P 500 are reporting marginal losses and the US 10-year yield is showing little signs of stress at 1.84%.
Also, the technical outlook would turn bullish only above the Dec. 4 high of $1,484.
Technical levels