Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Gold Prices Ascend for 6th Consecutive Day on Weaker US. Dollar

Gold Prices Ascend for 6th Consecutive Day on Weaker US. Dollar

Walker England, Kara Dailey,

Share:

Talking Points:

  • Gold prices jumped on cautious FOMC statement ,rising further on subpar economic data
  • US Durable Goods Orders & New Homes Sales missed the mark while annual inflation fell flat
  • Gold breaks from is descending trendline

Gold prices ascend for a 6th consecutive day as the prospect of a U.S. rate increase becomes less imminent and the pace of hikes less urgent. Ignited by a cautious FOMC statement last Wednesday, the rise has since been supported by diverging economic data in the U.S. and subsequently a weaker U.S. dollar.

The initial dollar index drop resulted from a change in the Federal Reserve’s forward guidance. Despite removing the term “patience”, the overall tone of the statement aired on the side of caution. With a slowdown in the housing sector and weakened export growth the committee explicitly stated that raising the rate will be an unlikely scenario at the April meeting. They further expanded stating that even after employment and inflation are near mandate levels, economic conditions may warrant keeping the federal funds rate below normal levels for some time.

The ensuing index tumbles have resulted from this week’s off-the-mark economic indicators. U.S. Durable Goods Orders fell short in February, declining from 2.0 to 1.4%—well below the expected value of 0.2%. Existing home sales also faltered coming in at 1.2 vs. the expected 2.0 percent. As a final influence, the annual inflation rate fell flat in February at 0.0%—a considerable distance from the targeted 2.0%.

Consequently, over the same time span in which gold prices rose, the US Dollar Index fell just over 2.0 percent. The drop has left price approaching the former resistance turned support level—near 11,870. Given that gold is priced in US dollars, this change in the US dollar index has made the precious metal a more attractive investment. In breaking above resistance, gold has traded as high as $1,199.

Gold Daily Chart

Chart Created by Walker England Using MarketScope2.0

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES