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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Mixed
GBP/USD
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
USD/JPY
Bullish
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
More View more
Real Time News
  • $GBPUSD corrects from stretched valuations, however, positioning clear is likely to entice dip-buyers. Get your market update from @JMcQueenFX here: https://t.co/sfFdBx9pN6 https://t.co/j6nnry65SW
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/oQrOpYINOj
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/LSVPlus0vv
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/rPd6B5KzuI
  • Time-cycle analysis suggests that the Japanese Yen could slide significantly lower against its major counterparts. Key levels for AUD/JPY, EUR/JPY and GBP/JPY. Get your market update from @DanielGMoss here:https://t.co/WPq4Z9zzEw https://t.co/VzVLrBbL9q
  • The Australian Dollar looks poised to outperform the haven-associated US Dollar and Japanese Yen. However, it may lose ground to the New Zealand Dollar. Key levels for AUD/USD, AUD/JPY and AUD/NZD. Get your market update from @DanielGMoss here:https://t.co/cuxRxl5WaF https://t.co/pujrmqSxV7
  • Has anyone explained the risk of inflation on the markets in terms of tendies?
  • The US Dollar is trying to break higher versus ASEAN currencies. The Singapore Dollar, Philippine Peso, Thai Baht and Indonesian Rupiah are under pressure. Will follow-through last? Get your market update from @ddubrovskyFX here:https://t.co/JOWG9q01q0 https://t.co/j2ICxgrLa3
  • The commodity-sensitive Canadian Dollar may continue outperforming its major counterparts in the coming weeks. USD/CAD, CAD/CHF, CAD/JPY and EUR/CAD key levels to watch. Get your $USDCAD market update from @DanielGMoss here:https://t.co/9bkVXQuP5C https://t.co/cLNEG36mZ8
  • We just closed out the heaviest week of volume for the $SPY (US equities) since June and $TLT (Treasuries) since March 16
Gold Price Rally Extends After June Fed Meeting - Key Levels to Watch

Gold Price Rally Extends After June Fed Meeting - Key Levels to Watch

Christopher Vecchio, CFA, Senior Strategist

Gold Price Talking Points:

- The June Fed meeting confirmed market speculation that the FOMC will soon embark on a interest rate cut cycle.

- Gold prices are on pace to close at their highest level of 2019, and their highest level since July 2016.

- Retail traders’ holdings are beginning to warn that positioning may weigh on the gold price rally soon.

Looking for longer-term forecasts on Gold and Silver prices? Check out the DailyFX Trading Guides.

The most anticipated Federal Reserve rate decision in quite some time has come and gone, leaving a big footprint on global financial markets in its wake. The June Fed meeting saw the FOMC confirm market speculation that an interest rate cut cycle will soon begin: the forward guidance provided by the ‘dot plot’ saw one FOMC member (Bullard) seeking a 25-bps rate cut at this meeting, and overall, eight policymakers who are calling for lower interest rates by the end of 2019.

June Fed Meeting Confirms Lower Real US Yields

As has been the case for several weeks now, the ongoing decline in US Treasury yields amid speculation that a Fed rate cut cycle is about to begin has been fundamentally bullish for gold prices. With inflation relatively stable around the Fed’s medium-term target of 2%, the drop in nominal US Treasury yields has created an environment where real US yields are falling. Historically, falling real US yields have underpinned environments where gold prices have outperformed.

Gold Volatility Pushing Higher amid Global Slowdown Concerns

The elephant in the room during Fed Chair Jerome Powell’s press conference was the impact of the US-China trade war on monetary policy. After all, the US-China trade war, as a fiscal policy endeavor, may not be able to be fully offset by accommodative monetary policy. That said, the FOMC is standing by and ready to act should conditions necessitate a series of interest rate cuts this year.

Accordingly, an environment marked by the uncertainty of the US-China trade war is filtering through into uncertainty over monetary policy. To wit: when asked about Fed policy and the US-China trade war, Fed Chair Powell took a roundabout way of saying that a US-China trade deal could eliminate the need for a Fed rate cut. Inherently, then, while rates markets are heavily leaning towards rate cuts now, it also appears that there is a significant risk of the Fed’s bias swinging back towards hawkish very quickly if a US-China trade deal materializes.

This uncertainty over the Fed’s next move is bullish for gold prices via gold volatility. While other asset classes don’t like increased volatility (signaling greater uncertainty around cash flows, dividends, coupon payments, etc.), precious metals tend to benefit from periods of higher volatility as uncertainty increases the appeal of gold’s and silver’s safe haven appeal.

GVZ (Gold Volatility) Technical Analysis: Daily Price Chart (July 2018 to June 2019) (Chart 1)

gold volatility, gold volatility technical analysis, gold volatility chart, gold volatility forecast, gold price volatility

Following the June Fed meeting, gold volatility (as measured by the Cboe’s gold volatility ETF, GVZ, which tracks the 1-month implied volatility of gold as derived from the GLD option chain) is on pace to close at a fresh monthly high, its highest close since the first week of January, and its third-highest close of 2019 overall. The breakout in gold volatility underpins the breakout in gold prices; if gold volatility declines, gold prices are likely to follow.

Gold Price Technical Analysis: Daily Chart (January 2018 to June 2019) (Chart 2)

gold price, gold technical analysis, gold chart, gold price forecast, gold price chart

Following the brief consolidation following the period when gold prices had moved in excess of 2% of the daily 21-EMA, the longer-term uptrend remains valid. In our last update it was noted that “with gold volatility rising once more, it seems increasingly likely that the next gold price move will be to the topside; the rally is set to continue.”

The break above the 1348.31 high set on June 7 has now triggered a bullish breakout, with a measured move up to a new 2019 high at 1376.39. But before then, gold prices will have to contend with the 2018 high at 1365.95 and the July 2016 high at 1375.03. Only if gold prices move below the daily 8-EMA, which has held up as support on a closing basis every session since the bullish outside engulfing bar on May 30, would the bullish outlook for gold prices become invalid.

IG Client Sentiment Index: Spot Gold Price Forecast (June 19, 2019) (Chart 3)

igcs, ig client sentiment index, igcs gold, gold price chart, gold price forecast, gold price technical analysis

Spot gold: Retail trader data shows 56.5% of traders are net-long with the ratio of traders long to short at 1.3 to 1. The number of traders net-long is 8.4% higher than yesterday and 3.6% higher from last week, while the number of traders net-short is 0.5% lower than yesterday and 14.5% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests spot gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail at cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

View our long-term forecasts with the DailyFX Trading Guides

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

DISCLOSURES