Gold (XAU/USD) prices are looking for direction after hitting a new record high on Monday and after China retaliated early Tuesday against US tariffs issued over the weekend. Beijing imposed 15% tariffs on US energy imports worth less than $5 billion, such as Coal and Liquefied Natural Gas (LNG), and 10% charges on US Oil and farm equipment. Beijing will also investigate Google for alleged antitrust violations. Markets are unclear about what to make of these retaliatory tariffs and have been showing mixed price action on Tuesday.

On the economic data front, the calendar is light ahead of the Nonfarm Payrolls report, due on Friday. On Tuesday, JOLTS Job Openings for December could be the topic of interest later in the day, followed by two Federal Reserve (Fed) speakers, Atlanta Fed Raphael Bostic and San Francisco Fed Mary Daly. This is where the young men will be separated from the men in trading after China retaliated against President Trump's tariffs imposed over the weekend. The erratic moves and volatility driven by headlines will take over the logic of price action from now on. Stick to the larger levels, which will act as intraday and longer-term support or resistance.

The first support comes in at the round $2,800 level, followed by $2,790, which was the November high. Monday's low in the week's chaotic open at $2,772 should act as the next support. Once that level is reached, a quick sprint to $2,721 could be in order.

Analysts and strategists have been calling for $3,000, but the area around $2,800 looks like a good starting point to take profits. Based on Monday's price action, technical analysis (pivot points) shows $2,839 and $2,864 as the next daily resistance levels. These will be important, along with logical big numbers like $2,850 and $2,880.(Newsmaker)

Source: FXstreet