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
EUR/USD
Mixed
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
Bearish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • The US Dollar may seesaw as investors navigate what could be a volatile week packed with US GDP data, rising Covid-19 cases, Q3 corporate earnings and more. Get your #currencies update from @ZabelinDimitri here: https://t.co/UNRcd3c9uA https://t.co/BiUiOV4cXC
  • USD/MXN pushes lower towards a critical support level in the midst of continued political uncertainty. Get your #currencies update from @HathornSabin here: https://t.co/HEAzgJJJjg https://t.co/NU9wYbIuni
  • Gold Forecast - via @DailyFX “Gold price outlook still hinges on stimulus deal expectations and corresponding swings in real yields.” What will I have my eyes on in the week ahead? Link to Analysis: https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2020/10/23/gold-forecast-xau-usd-at-the-mercy-of-a-fiscal-stimulus-deal.html $GC_F $XAUUSD $GLD https://t.co/GWEI4d4mMu
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/rxswe1gVL0
  • Talks between the EU and UK restarted today and will continue over the weekend as negotiators from both sides battle against the clock. Get your #currencies update from @nickcawley1 here: https://t.co/ER8IT1yxYO https://t.co/Jeeu2P9mwB
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/W9awqb818J
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/lucvsACxu5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/yywnE39MLU
  • The US Dollar is losing ground against ASEAN FX, with USD/SGD and USD/IDR possibly readying to extend declines. Will USD/PHP and USD/MYR follow? Find out from @ddubrovskyFX here: https://t.co/l705RWumj5 https://t.co/jBbMKYp0F5
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/YUhC9cCDpy
Gold Trims Yearly Gains as Bernanke Signals No QE- Techs Point Lower

Gold Trims Yearly Gains as Bernanke Signals No QE- Techs Point Lower

2012-06-22 22:07:00
Michael Boutros, Strategist
Share:
Gold_Trims_Yearly_Gains_as_Bernanke_Signals_No_QE-_Techs_Point_Lower_body_Picture_5.png, Gold Trims Yearly Gains as Bernanke Signals No QE- Techs Point Lower

Fundamental Forecast for Gold: Bearish

Gold was sharply lower at the close of trade this week with the precious metal plummeting 3.63% to close out its largest decline since the week ending May 11th. Strength in the greenback and dwindling expectations for another round of quantitative easing from the Fed, weighed on demand for the precious metal which continues to trade within the confines of a bearish technical formation. With price of gold now nearly unchanged on the year (up a fractional 0.5% YTD) the outlook remains heavy with price action this week pointing to further declines ahead.

Gold prices came under substantial pressure after the Federal Reserve refrained from announcing another round of quantitative easing on Wednesday with the central bank opting to extend the sales of short-term government debt to fund purchases of longer-dated securities, a program dubbed “Operation Twist.” The decision roiled markets as expectations for another large-scale asset purchase program mounted ahead of the FOMC policy decision. Although the central bank held off on QE3, downgrades on growth, employment, and inflation forecasts suggest that more easing may be in the cards in the months ahead with Chairman Bernanke citing that, “additional asset purchases are among the things we would consider if we need to take additional measures to strength the economy.” However in the absence of further dollar diluting easing measures (operation twist being a more sterile form of easing) gold has lost its luster as an inflationary hedge with the precious metal likely to remain under pressure as the greenback stays well supported.

Looking ahead to next week, traders will be closely eyeing key data out of the US with consumer confidence, durable goods orders, personal income/spending, the University of Michigan confidence survey’s and the final read on 1Q GDP and personal consumption figures on tap. With the recent softness in domestic economic data prompting the Fed’s move to extend operation twist, investors will now be closely eying figures on consumer confidence and growth and if the data continues to tail off, look for calls for further Fed action to take root. However with Bernanke specifically citing concerns about diminishing returns on continued Fed easing, any additional efforts to support the economy are likely to come by way of other non-standard measures as market tolerance begins to build. As such, look for the use of gold as a ‘haven play’ and a hedge against inflationary pressures to wane with advances in the precious metal likely to be limited in the interim.

From a technical standpoint, gold has remained in remained within the confines of a descending channel formation dating back to the February highs with the price closing at $1570 after rebounding sharply off the 38.2% Fibonacci retracement taken from the February decline at $1628 earlier in the week. Interim daily resistance now stands at the 23.6% retracement at $1590 with subsequent ceilings seen at $1628 and the 100-day moving average at $1651. Soft interim support rests at $1560 and is backed by the June low at $1544 and the 2012 lows put in last month at $1528. Look for bullion to remain under pressure with a break below the $1528 threshold risking substantial losses for the precious metal with only a breach above the monthly highs at $1640 dispelling further downside pressure.

-MB

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

DISCLOSURES