The gold rate has been on an increase since Monday, gaining support due to increased chart-based buying. The dwindling US dollar index also favors the precious metals market. As of now, the US dollar index has been falling against a basket of its peers, standing at 95.95. The technical posture in the near term for gold bullion remains positive.
Gold is currently trading at $1,280.80 and is poised to test resistance at $1,350 in 2019.
The stock market delivered follow-through buying to indicate a new uptrend in the wake positive gains seen last Friday. The S&P 500 climbed by 3.3 percent to 2,531, showing a 1.7 percent improvement for this week. This is a 7.5 percent improvement for the S&P following its low close on December 24, closing on a bear market by falling 20 percent from its record-highs seen on an intraday basis.
Investor and trader attitudes have improved when it comes to trading due to the surprisingly positive US jobs report that was released this Friday, with over 312,000 nonfarm payrolls added. There was a 0.4 percent improvement in wage growth with a pickup participation by over 400,000 workers. This happened partly due to the comments made by the Federal Reserve Chairman Jerome Powell who asserted that high inflation problems in the US are not going to be problematic. To prevent the economy from slumping, the government will enforce flexibility in its monetary policy.
A big reason behind the meteoric rise in gold rates was the disruptive trade relations between US and China. Experts believe that any improvements made in the stock market will depend heavily on how the trade relations will continue. To prevent further economic slowdowns, Chinese and United States officials are currently holding vice ministerial level trade talks, with another round of meetings in the following week.
Chinese officials were reported to have said that they will resolve their trade disputes with US, but only on an equal footing. The US has currently imposed tariffs worth $250 billion on Chinese goods, with mainland China following a counter of its own.
Heavy Impacts on the Stock Market
Stocks traded in Asia have seen a combination of highs and lows as investors patiently wait for a breakthrough in the US-China trade talks. Japan’s Nikkei 225 surged by 0.82 percent closing at 20,204.04, and the Topix index improved by 0.39 percent to close at 1,518.43.
Nissan, the Japanese car maker, gained 0.21 percent after seeing losses in the automobile market. The company was seeing poor performance because of the arrest of its former Chairman Carlos Ghosn last year due to allegations of financial misconduct.
In South Africa, the Kospi slumped by 0.58 percent and closed at 2,025.27. The electronic manufacturer Samsung also reported a 1.68 percent fall after their quarter earnings fell way off the mark of initial analyst expectations.
LG Electronics also saw dwindling shares which slumped by 3.58 percent after hinting that its profits fell by almost 80 percent in the fourth quarter. SK Hynix, the chipmaker found gains of 0.85 percent, rising by 3 percent during the trading day.