After spending the majority of November range bound, the gold price has finally broken out to the upside as investors seek out safe havens from the anticipated fall out from Brexit among other things and events over the next week are going to show whether gold can sustain this rally.
The two events in question are the job numbers due for the release on Friday followed by the all-important Brexit vote the following Tuesday.
The news on Friday will help determine whether the US Federal Reserve will lift interest rates later this month and a bad reading may through this into doubt which will send the US dollar reeling and gold should benefit as a result.
On Tuesday, the house of commons in the UK parliament are due to vote for the Brexit deal that UK Prime Minister Theresa May negotiated last week and if the motion gets voted down, like many expect, the British economy is expected to dive which should also drive up the price of gold.
“Traders are watching two important events in the coming days,” the ongoing developments on Brexit and how this factor can trigger a bigger move in the market and Friday’s U.S. nonfarm payroll data, said Naeem Aslam, chief market analyst at Think Markets UK.
“If the Brexit vote is not approved, this will be a risk-off event for the market and we could see the price of gold moving higher,” he said. “Similarly, a soft U.S. NFP reading will only add fuel for this rally.” He added.