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.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • A recession is typically accompanied by falling stock prices, but equities are not the be-all and end-all for recession investment strategies. Get your market update from @PeterHanksFX here: https://t.co/H0Rf3AkECs https://t.co/5Il5ptMnMu
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/y2tXiYs9aV
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/H6I3MXjW06
  • As prices dance around on charts, traders are often looking for reasons to explain price movements; however, the underlying source of price movement boils down to the relationship between supply and demand. Learn more about the forces of S&D on forex here: https://t.co/8LfkLXbj2W https://t.co/ZsHdd9NFcO
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/TisnGYxllM
  • Here my weekend trading video 'Dow, VIX, Dollar and Gold: Levels and Volatility to Gauge the Markets' https://www.dailyfx.com/forex/video/daily_news_report/2020/03/28/Dow-VIX-Dollar-and-Gold-Levels-and-Volatility-to-Gauge-the-Markets-.html?ref-author=Kicklighter&QPID=917719&CHID=9
  • #Silver and #gold prices have had a fascinating 2020, counterintuitively falling as the #coronavirus’ economic hit has become horribly apparent. A rebound is now afoot. Get your market update from @DavidCottleFX here: https://t.co/nng7lwQ22E https://t.co/JwehIVbBA2
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/mcq5Bq2Jui
  • The $USD soared against the Indonesian Rupiah, with USD/IDR eyeing its best month since the 1997-98 Asia financial crisis amid the #coronavirus outbreak. Can this trend continue? Find out from @ddubrovskyFX here:https://t.co/M3sDZOftrE https://t.co/sbIbp68UOh
  • The $USD may be at risk as technical signals show USD/SGD, USD/MYR and USD/IDR may turn lower. Ahead, the markets will likely weigh US fiscal stimulus bets against dismal data risk. Get your market update from @ddubrovskyFX here:https://t.co/iGqBrY6qyO https://t.co/kJ89YgK3Mm
Guest Commentary: Gold Continues to Break New Highs - Daily Outlook 08.09.2011

Guest Commentary: Gold Continues to Break New Highs - Daily Outlook 08.09.2011

2011-08-09 14:41:00
Lior Cohen, Energy Analyst for Trading NRG,
Share:

Gold Continues to Break New Highs - Daily Outlook August 9

The stock markets took a plunge yesterday over the decision of the rating agency Standard and Poor's to downgrade the US credit rating; President Obama's attempt to stabilize the markets didn't by addressing the recent S&P's decision didn’t stop the sharp falls in the markets. Gold reached news highs and is likely to continue the sharp rises during the day. Today, the Federal Reserve will meet to decide on the interest rate; Canadian housing starts stats will be published.

Let's examine the precious metals market for today, August 9th:

Gold sharply inclined yesterday by 3.72% and reached a new high of $1,713; this was the sharpest daily percent increase gold had in 2011; the second largest gain in a single day for gold was back in July 5th as it rose by 2.03%. Silver sharply inclined by 3.06% to $39.38. During August, gold increased by 5%, but silver fell by 1.8%.

The chart below shows the normalized gold and silver (July 29th 2011=100). As seen below, gold rose very rapidly during most of the August so far; on the other hand, silver erased most of its gains the end of last week so that eventually it didn't reach a new high this month (yet).

Guest_Commentary_Gold_Continues_to_Break_New_Highs_Daily_Outlook_08.09.2011_body_Gold_prices_forecast__silver_price_outlook_2011_August_9.png, Guest Commentary: Gold Continues to Break New Highs - Daily Outlook 08.09.2011

Federal Reserve Rate Decision

Today the Federal Reserve will decide on the basic interest rate decision and the Bank's monetary policy. Due to the recent downgrade of the US credit rating, it's becoming less likely for the Fed to raise interest rates or to announce the implementation of QE3; since the markets are pulling funds from the US economy and stock markets, raising rates will be equivalent to adding gas to an open fire: it will just further pull money from the stock markets. Therefore, it's more likely that Bernanke will try to calm the markets, reassure the financial community of the monetary stability of the US economy and will pull back the QE3 card for the near future.

S&P500 / Gold & Silver– August Update

The American stock markets suffered the most yesterday from the reaction to the US credit rating downgrade over the weekend: the S&P500 fell by 6.66% yesterday, the Dow Jones index plummeted by 5.55%. The market also promptly reacted as gold rose very sharply during most of August. The chart below shows the linear correlations of the daily percent changes of bullion prices (gold and silver) with S&P500 during the past several months. The chart shows that the linear correlation of gold with S&P500 is currently negative and strong; the same was also true in July. Silver price, on the other hand, didn't show much of a correlation to S&P500 in the past couple of months; this means that the drastic falls in the Stock markets are in line with the rises in gold prices but not of silver price. This finding should be taken with a grain of salt because there are very few samples points in August so that this finding isn't significant.

Guest_Commentary_Gold_Continues_to_Break_New_Highs_Daily_Outlook_08.09.2011_body_Correlation_Gold__Silver_Prices_and_SP500_APRIL_AUGUST_2011_9_AUUGST.png, Guest Commentary: Gold Continues to Break New Highs - Daily Outlook 08.09.2011

US Dollar / Gold & Silver– August Update

The Euro/USD declined on Monday by 0.73%; the USD appreciated against other currencies including the AUD and CAD. If the USD will continue to depreciate during the day, this might continue to curb some of the rally of gold and silver. Currently it seems that silver, more than gold is affected from the appreciations of the USD.

Gold and Silver Outlook:

Gold continues its rally in August mainly due to the back wind it enjoys from the sharp falls in the Stock markets; as long as the stock market will trade down, more traders will push their finds into gold. The news of the US downgrade will continue to push traders from stock market towards gold; the Federal Reserve meeting today might also affect the market depends on the decisions, if any, that will be made there. On the other hand, it seems that silver isn't rising as gold is, because silver is less affected by the fall in the Stock markets and is more affected by the changes in the USD which is rising due to heavy trading. In any case, these sharp changes are likely to dissipate in the next few days and then gold and silver will stabilize and resume their slow upward trend.

For further reading:Gold and silver prices outlook for August 2011

Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.

By: Lior Cohen, Energy Analyst for Trading NRG

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

DISCLOSURES

News & Analysis at your fingertips.