Gold Spot Price Nears Previous High at 1375

3 August, 2016

The spot price for gold is up 4.06% from 1313.77 on 26th July to 1367.16 on 2nd August, a three week high. There have been several factors providing a lift for gold prices.

Firstly, the recent weakening of the dollar gives rise to the increase of gold prices. Last Wednesday, the Fed kept rates unchanged as the US economy was not solid enough for a rate hike. Furthermore, the US QoQ GDP figure released last Friday underperformed. Consequently, the market consensus was that Fed will not raise interest rates by the end of this year. As a result, the dollar future index plunged 2.25% from 97.515 on Wed 27th July to 95.325 on Fri 29th July. The bearish trend of the dollar provides a cushion for gold prices.

Secondly, monetary easing from other central banks also bolster gold prices. The Reserve Bank of Australia cut rates to a record low of 1.5% on 2nd August. Also markets expect that the Bank of England might announce a rate cut along with a stimulus package this coming Thursday. Loose monetary policies resulted in many investors turning to safe havens like gold in order to secure asset values from currency weakening and rise of inflation, pushing gold prices up.

The current gold spot price is trading around 1364, which is close to the previous high at 1375 on 6th and 11th July, forming a double top pattern, indicating heavy profit-taking and selling pressure at the top.

The US non-farm payroll data will be released on Friday, which will be the key driver for the near term trend of the dollar. If the figure outperforms, the dollar will strengthen, the gold prices will fall. By contrast, if the figure underperforms, the dollar will drop further, the gold prices will continue to be bullish.

Before the non farm payroll figure is released, gold price will be likely keeping on oscillating in the uptrend channel. On the 4 hourly chart, the price is above all the EMAs (exponential moving averages), consecutive long bullish candles show a clear bullish trend. Yet The upside selling pressure at 1375 is heavy, also CCI indicator (Commodity Channel Index) shows a divergence from the price, indicating that the momentum is waning. Be aware of a pullback in the price zone between 1360-75.

[gold-h4- (00000002)]

The first upside resistance is the intra-day high yesterday at 1367. The second resistance is the uptrend line resistance at 1371.5. The third resistance is the significant level of previous highs on 6th & 11th July at 1375 followed by another major resistance at 1400.

Downside support zone is between 1350-60, followed by the 23.6% post-referendum Fibonacci retracement at 1345.

The ADP Non Farm Employment Change will be released at 13:15 GMT, which is regarded as a predictor of the government’s non-farm payroll data on Friday 5th August. Keeping an eye on the trend of the dollar future index before the release of non farm payroll on Friday.


Source link  
Fed Monetary Policy Report to be released

This report is release twice a year and provides an insight into the conduct of monetary policy and economic developments and prospects for the future for the...

The Pound continues to weaken

Cable (GBPUSD) took a hit yesterday as Boris Johnson resigned from the Cabinet following the earlier decision by David Davis to part ways...

The latest Brexit proposals

The UK's Brexit Secretary David Davis has resigned along with two junior ministers, Steve Baker and Suella Braverman, over PM May's latest softer Brexit proposals...


Some ECB members want earlier rate hike

The markets remain subdued after yesterday's 4th of July celebrations in the US. Despite this Oil headlines are dominating the markets once again. US President Trump...

Gold has played out as a double top

The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now hit the 1240.00...

Gold chart has played out as a double top

The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now reached...


President Xi warns of Full Scale Trade War

Risk on sentiment returned briefly yesterday as markets retraced some of Monday’s selloff but sentiment in Asia has declined overnight. The PBOC cut...

USD extend losses in risk adverse markets

Stock markets fell hard yesterday as trade tensions deepened and the consequences of such action has investors worried. US Company Harley Davidson...

Market participants out of risk assets

Over the weekend President Trump indicated that if trade barriers and tariffs against the US were not removed that he would have no choice but to add further...


In the past 24 hours Bitcoin has gained 5.17% and reached $6709.39. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.2459% and is now at $1.171. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 3.55% and is now at $475.426. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM88%
3HYCMHYCM86%
4FIBO GroupFIBO Group79%
5FxProFxPro78%
6FXCMFXCM73%
7AvaTradeAvaTrade69%
8HotForexHotForex68%
9XMXM68%
10Alfa-ForexAlfa-Forex66%
  


Share: