Gold Moves Lower On Chinese Data

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Gold Moves Lower On Chinese Data

Gold (Xau/Usd) Moves Lower On Chinese Data

Gold (XAU/USD) is now trading near the $2650 handle on Monday as the Chinese export data shows a decline. The decline in Chinese exports shows that not everything is alright with the 2nd largest economy in the world.

Economic problems in China automatically mean bad news for gold as it is among the largest markets for precious metals.

The data shows a 2.4% jump in Chinese exports during September. This is a lot lower than last month's reading of 8.7% and the forecast of 6%.

China'S Exports Decline In September

After the recent reading, the trade balance of China is now $81.71 billion. Once again, this is below the forecasts and last month's reading.

The data from China has made one thing clear: The Chinese economy is going through a prolonged period of slowdown. This also means the demand for gold in China will likely go down.

However, it doesn't mean that there is only bad news for the Gold market. One particular good news for Gold is that interest rates across the globe are going down gradually.

The recent meeting of the ECB on Thursday will likely result in a 25 bps rate cut. If this happens, that will be the 2nd rate cut and will provide a boost to the Gold (XAU/USD). In the USA, the central bank is also expected to cut the rates by 0.25% in November after the PPI and the CPI release.

If we look at the technical analysis of Gold (XAU/USD), it has finished its correction move and is now rising higher.

If the Gold (XAU/USD) moves higher, there's a chance that it will bounce off from the nearest resistance and go back into the familiar range. But if the momentum is strong enough, it could also cross the $2700 and then target the $2800 level.

In both the medium and long term, the Gold (XAU/USD) trend remains bullish. So, it is only a matter of time before the uptrend of Gold (XAU/USD) resumes once again.

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