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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Oil - US Crude
Wall Street
More View more
Real Time News
  • #EUStoxx50 Index at Risk as #Covid_19 Second Wave Fuels #Volatility $FESX $EUSTX
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.74% FTSE 100: 0.69% France 40: 0.61% US 500: -0.15% Wall Street: -0.18% View the performance of all markets via
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true.Simplify your trading strategy with these four indicators here:
  • Dovish comments from RBA Dep Gov Debelle overnight sees money markets raise expectations that the RBA could cut rates further. - Remuneration on ES balances is currently 10bps, allowing for rates to be cut a little more without going into negative territory $AUD
  • Crude oil prices weighed by demand concerns, rising US Dollar. Bollinger Band and "death cross" both flag more downside risk ahead. Read full article here:
  • Wall Street Futures turned lower before European open: Dow Jones (-0.43%) S&P 500 (-0.45%) Nasdaq 100 (-0.63%) [delayed] -BBG
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release!
  • [corr] All things considered, $USDSGD, $USDMYR, $USDPHP and $USDIDR failed to generate much upside momentum lately despite rising volatility in the #SP500 Could this continue from here? Check out my latest #ASEAN fundamental outlook here -
  • 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:
  • 🇳🇱 Consumer Confidence (SEP) Actual: -28.0 Previous: -29
Gold Break-Out Fueled by QE Expectations- All Eyes on Jackson Hole

Gold Break-Out Fueled by QE Expectations- All Eyes on Jackson Hole

2012-08-25 02:07:00
Michael Boutros, Strategist
Gold_Breakout_Fueled_by_QE_body_Picture_1.png, Gold Break-Out Fueled by QE Expectations- All Eyes on Jackson Hole

Fundamental Forecast for Gold: Bullish

Gold is markedly higher at the close of trade this week with the precious metal surging 3.37% by the close of trade on Friday. The FOMC minutes coupled with rising expectations for further easing from global central banks have fueled a massive rally in gold with further gains likely in the weeks ahead. However with the Jackson Hole symposium on tap for next week, topside advances may be limited over the next few days as market participants look for clarity amid the ongoing shift in policy outlooks.

The release of the FOMC minutes from the August 1st policy meeting was the highlight of the week with gold prices reacting decisively to expectations for further Fed easing. The minutes cited that “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.” Markets aggressively turned on the US dollar with gold prices soaring to fresh 4-month highs above $1670. Although Federal Reserve Chairman Ben Bernanke has already stated expectations for modest, lackluster growth in the months ahead, its seems as though another round of central bank easing is at hand with investors flocking into the yellow metal as a traditional means of hedging inflationary pressures.

The much anticipated Economic Policy Symposium in Jackson Hole, Wyoming will be central focus next week and the fresh batch of central bank rhetoric coming out of the conference is likely to heavily impact gold prices as market participants weigh the prospects for future monetary policy. However, should Fed Chairman Bernanke refrain from hinting at QE3, the recent advance in gold could be at risk and we may see a sharp reversal in bullion as investors scale back bets of another large scale asset purchase program. Indeed St Louis Fed President James Bullard argued that the FOMC minutes were a bit “stale” as it failed to take into account the recent batch of improving US economic data and we may see the central bank strike a more neutral tone for monetary policy as the recovery slowly gathers pace. Still, it is becoming more apparent that the board is in fact leaning towards further liquidity injections and as such, gold’s break-out this week may just be the start of another multi-month rally.

From a technical standpoint, gold has made substantial progress this week with prices breaking out of a near 4-month long triangle formation as expectations for more central bank easing take root. Gold breached above the 200-day moving average at $1644 and long-standing trendline resistance dating back to the all-time highs set back in September before closing out the week just below the May highs at $1671 with an RSI break above trendline resistance dating back to the June highs confirming the break-out. Although the break signifies a clean technical reversal, the Jackson Hole Economic Symposium does present substantial event risk and if policymakers fail to satisfy market expectations for more easing we could see gold take back a portion of this week’s rally. As such we remain cautiously bullish with investors advised to reduce holding’s heading into Friday when Bernanke takes the stage with ECB President Mario Draghi following on Saturday. Daily support now rests with the 100% Fibonacci extension taken from the May and June troughs at $1662 backed by the June high at $1641 and the July high at $1630 with only a break below August 15th low at 1590 invalidating our directional bias. A break above Thursday’s high of $1675 eyes subsequent topside targets at the April High at $1683, $1700, and the 161.8% extension at $1733. Note that daily RSI has now broken above the 70-overbought threshold for the first time since early February with a pullback of some magnitude likely to offer fresh long entries. -MB

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