We make a start with the analysis over the day that Gold lost most of the ground mentioned in our intro. That day was the 3rd of June and the movement was carried out during the early Asian session and lasted until the European afternoon. No important financial releases related to Gold where expected at that specific time. Yet a rather important speech by Federal Reserve Bank of Dallas President Robert Kaplan on national and global economic issues hosted by the Federal Reserve Bank of Dallas is among the top reasons that may have created this movement for Gold. During his speech Robert Kaplan called for the Federal Reserve to debate how and when to start reducing its support for the economy.

As an explanation to the advantage of our followers a deeper understanding is required here as this can significantly change the current economic fundamentals. In order to support the economy, the Fed carries out quantitative easing which is a process of bond buying by the central bank using new printed money or by the means of electronic transaction which again increases the money supply. At this point we must understand the impact on the currency. As the Fed prints more money and increases supply, the USD becomes cheaper and inflation rises. One of the effects of this action is usually higher Gold prices. With Robert Kaplan’s comment however, it was comprehended that the QE program may need to be reduced or even done with, which seems to reverse the current fundamentals of the US economy. This could be the reason behind Gold’s sudden drop on the specific day and time. Any similar headlines on the Fed changing its stance could have a similar effect on Gold.

Moreover, on the next day, the 4th of June the market was filled with optimism over the soon to be released US employment report for May. As often happens however, the figures may have not satisfied traders especially speaking of the NFP figure which in some analysts opinion could have been better. In our personal view, the figures could have been worse and the US employment report for May is superior compared to the one released in April. Yet the market’s reaction was to push risk related instruments like Gold to higher prices and Friday’s session managed to do exactly that for the yellow metal. Indeed the US employment report created volatility within the FX and Gold markets just exactly as we noted in our last Gold market review. We would like to point out that from our perspective, the market will react to expectations rather than previous figures.

As conclusion we would like to point out some upcoming economic releases from the US that may determine the price action and direction of Gold’s price possibly being of interest to traders. On the 10th of June we get the US inflation data for May and the weekly Initial Jobless claims figure. We would like to highlight inflation at this point as it has served Gold’s price direction previously and could entice traders. On the 11th of June we get the Preliminary University of Michigan Sentiment for June. The final and very important financial releases before our next report will be on the 15th of June when we get the US Retail Sales and Industrial Production figures both for May.

Análisis técnico

XAU/USD 4 hour chart

After the 3rd of June which can be considered the most active day for Gold in the past weeks the price action has been moving within our currently noted (R1) 1900 resistance and our (S3) 1860 support. As an important resistance that was tested twice in May we have also noted the (R2) 1913 line. Also the (R3) 1927 could be a target for the bulls in case of a notable run higher. If the precious metal is to head south then the (S1) 1883 line maybe the first to be tested. If the selling persists and the price action falls to lower levels we could see the (S2) 1871 line being revisited while if this takes place then the (S3) 1860 could also be seen once again as it was tested in May. The RSI has steadily returned from a brief fall below the 30 level on the 3rd of June yet the trend line seems to be stabilizing at 50 which could be a bearish sign in the short term. Even though Gold’s steady upward movement may have been threatened in the past week the trend was not broken in our opinion. Yet at the moment we may be seeing some sideways tendencies being in play. If the (R1) 1900 round number level is breached convincingly, then higher grounds are inevitable in our opinion.

Si tiene usted alguna pregunta o comentario sobre este artículo, escriba un correo directamente a nuestro equipo de investigación research_team@ironfx.com   

Descargo de responsabilidad:

Esta información no debe considerarse asesoramiento o recomendación sobre inversiones, sino una comunicación de marketing. IronFX no se hace responsable de datos o información de terceros en esta comunicación, ya sea por referencia o enlace.

The post Gold eyes $1900 appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

Solid financial data from the US in the past days, seems to have worked an unexpected trick on various markets and may have left traders puzzled for the time being. US ISM Manufacturing came out much higher than expected while on the past Friday the US employment report rocked the scene with superb figures, as the unemployment rate dropped further to 6.0%. While all this was taking place however, the greenback was slumping. The fall was also extended on Monday with the release of the record ISM services report. Most traders may have been expecting the USD to strengthen even further yet the opposite took place. On the other hand, Gold’s price moved higher in the past three consecutive days and reached higher on Tuesday’s European morning. The bullish reaction is evident yet traders have a long way to go before reversing Gold’s trend so far in 2021.

The bullish reaction from Gold traders however, could be aligned with the overall view on the US economy by the Federal Reserve. The financial data received in the past days could possibly be better than expected and could be signaling an even faster recovery than analysts and economists predicted. Can the Fed now be forced to change its loose monetary policy and switch to a more appropriate one, after the recent upbeat releases? This could be the message that Gold traders may have received in the past days prompting them to hit the offer button. Traders are advised to be mindful of the FED minutes to be released on the 7th of April as the event could prove useful for further clarification.

On the other hand yesterday the Wall Street Journal claimed the Senate’s nonpartisan parliamentarian was in favor of a Democratic effort to pass additional legislation, opening the door for Democrats to approve more fiscal actions. The same report states that plans of a $2.3 trillion infrastructure plan is on the table and could be announced shortly. In our opinion, announcements of any new fiscal measures can be considered a highly tradable event for Gold, possibly favoring the bears similar to what happened when the $1.9 trillion fiscal package announcement was delivered.

Finally, in the next day’s important financial releases from the US could move gold’s price upon release thus caution is advised if traders are planning to place orders. On the 8th of April Thursday we get the weekly US initial jobless claims figure. Moving into the next week on Tuesday the 13th of April we get the US CPI data for March, which tends to be a decisive metric for the economy’s recovery and we expect the market to keep an eye out specifically for this event.

Análisis técnico

XAU/USD 4H Chart

After the recent selloff that Gold’s price displayed, the precious metal fell to test our (S3) 1680 support level. This level was tested once more in 2021 back on the 8th of March making the support line a determining factor for the bears or bulls accordingly. However, higher we could also expect a brief stop of the price action at the (S2) 1700 round number level. Yet at the moment the yellow metal is trading above the (S1) 1720 support line which was tested extensively in March proving to be rigid, before breaking recently. On the other hand, our first resistance is found at the (R1) 1755 level which was last tested on the 18th of March. Higher we have noted the (R2) 1775 line and even higher the (R3) 1795 barrier. At the moment, Gold’s price action is between the (R1) 1755 resistance level and the (S3) 1680 support level forming a sideways trend line. These levels even though tested have not been breached in March or April. In a more long term view however, the precious metal remains in a downward trend.

Si tiene usted alguna pregunta o comentario sobre este artículo, escriba un correo directamente a nuestro equipo de investigación research_team@ironfx.com   

Descargo de responsabilidad:

Esta información no debe considerarse asesoramiento o recomendación sobre inversiones, sino una comunicación de marketing. IronFX no se hace responsable de datos o información de terceros en esta comunicación, ya sea por referencia o enlace.

The post Gold regains attention after recent jump appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

The gold forecast for 2021

Goldman Sachs, one of the world’s leading investment banks, expects gold to continue climbing in value as we move into 2021, setting a price target of $2,300 per ounce. In a recent market forecast, their analysts were of the view that gold could continue its bull run, stating: “In our view, the structural bull market for gold is not over and will resume next year as inflation expectations move higher, the US dollar weakens and emerging-market retail demand continues to recover.” Goldman also predicts a growth in demand for gold, particularly across emerging markets, such as China and India. This theory is further enhanced by a belief that a US administration under President-elect Biden with a softer trade policy will support a gold rally. However, they did acknowledge that in the short term, it may be difficult for gold to generate any real or meaningful momentum either way, in terms of an upwards or downward movement. Meanwhile, analysts at Australian bank ANZ expect the metal to climb to $2,300 per ounce at the beginning of next year. Citibank shared this level of optimism in their own forecast, placing their gold price estimate at an even higher rate of $2,400 by mid-2021. Indeed, such valuations are indicative of what is likely to be the peak highs of any rally by the commodity. Looking back at history can sometimes be a good indicator of where a commodity could be heading in terms of value. However, there is no precedent for a global pandemic where the economies of most – if not all – of the world’s wealthiest nations suffer extreme recessions. Therefore, we are in unchartered territory, and it remains to be seen what the impact will be on the markets in the short, medium and long-term.

Should traders invest in gold?

The question that will undoubtedly be on the minds of every investor will be whether or not to return to the safe haven of the yellow metal. Of course, as with any market forecast, one can never fully know for sure, with estimates – particularly long-term – being somewhat difficult in the current climate. It is true to say that current projections for the price of gold is on the bullish side, with the metal performing very well in the latter part of this year. However, it should be noted that, at present, the global financial markets continue to be highly volatile. This should certainly be factored in, when deciding where to invest going forwards. In times such as these, it is recommended that traders keep well briefed and updated with the latest market trends, news and forecasts. Keeping tabs on technical analysis and the opinions of expert market analysts is also advised, before making any investment decisions and commitments.

Descargo de responsabilidad:

Esta información no debe considerarse asesoramiento o recomendación sobre inversiones, sino una comunicación de marketing. IronFX no se hace responsable de datos o información de terceros en esta comunicación, ya sea por referencia o enlace.

The post Could Gold Continue its Rise in 2021? appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.