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
Bearish
Oil - US Crude
Bearish
Wall Street
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
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • Wonder what insight on the situation with China will come out of this. @ZabelinDimitri has the background - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/05/25/AUD-May-Fall-on-Australia-China-Tensions-Euro-Eyes-500b-Proposal.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr https://t.co/Szs7ii3ufu
  • HEADS UP: Australian PM Scott Morrison is due to speak at the National Press Club in Canberra in approx. 2 hours (2:30 GMT). https://t.co/kImzlZLG0k #AUDUSD
  • 🇸🇬 GDP Growth Rate YoY Final Actual: -0.7% Expected: -1.5% Previous: 1% https://www.dailyfx.com/economic-calendar#2020-05-26
  • 🇸🇬 GDP Growth Rate QoQ Final Actual: -4.7% Expected: -7.4% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2020-05-26
  • SINGAPORE Q1 GDP -4.7% q/q annualized vs -8.2% expected, -10.6% earlier estimate #USDSGD
  • Heads Up:🇸🇬 GDP Growth Rate YoY Final due at 00:30 GMT (15min) Actual: -0.7% Expected: -1.5% Previous: 1% https://www.dailyfx.com/economic-calendar#2020-05-26
  • Heads Up:🇸🇬 GDP Growth Rate QoQ Final due at 00:30 GMT (15min) Actual: -4.7% Expected: -7.4% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2020-05-26
  • On Friday, EUR/GBP surged to an over six-week high at 0.8940 then closed the weekly candlestick in the green with a 2.3% gain. Get your $EURGBP market update from @malkudsi here: https://t.co/ln09Ijn7rd https://t.co/oOiE19ZCuW
  • Heads Up:🇸🇬 GDP Growth Rate YoY Final due at 00:00 GMT (15min) Expected: -1.5% Previous: 1% https://www.dailyfx.com/economic-calendar#2020-05-26
  • Heads Up:🇸🇬 GDP Growth Rate QoQ Final due at 00:00 GMT (15min) Expected: -7.4% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2020-05-26
Gold Slides to Fresh Monthly Low- $1739 Estimated Range Low

Gold Slides to Fresh Monthly Low- $1739 Estimated Range Low

2012-10-13 02:26:00
Michael Boutros, Strategist
Share:
Gold_Slides_to_Fresh_Monthly_Low-_1739_Estimated_Range_Low_body_Picture_1.png, Gold Slides to Fresh Monthly Low- $1739 Estimated Range Low

Fundamental Forecast for Gold: Neutral

Gold was softer at the close of trade this week with the precious metal shedding 1.8% to trade at $1754 at the close of trade in New York on Friday. While further weakness is likely in the near-term, losses are likely to remain limited as central banks around the world continue to strike a dovish outlook for monetary policy amid ongoing concerns regarding global growth prospects. As such, we will remain neutral at these levels after prices triggered our primary objective at $1795, with pullbacks likely to offer favorable long entries.

The Fed’s beige book released earlier this week struck a more upbeat tone than expected with all twelve Fed districts reporting that economic activity “expanded modestly” with improvements seen in manufacturing and housing. Although employment remained little changed, the report marks the first time all twelve districts reported improvements in underlying economic activity with some districts citing improvements in residential real estate conditions as existing home sales and residential construction strengthened. While the report bodes well for the US economy, the data is unlikely to weigh on monetary policy in the near-term as Chicago Fed President Charles Evens has already explicitly cited intentions to maintain an accommodative stance so long as the unemployment rate remains above 7% and inflation below 3%. As such, it’s likely that gold will remain in demand as a hedge against inflation amid global central bank easing.

Looking ahead to next week, gold trader will be closely eyeing inflation data on Tuesday with September CPI expected to up-tick to 1.9% y/y from 1.7%. Core prices (ex food & energy) are expected to rise to 2.0% from 1.9% and a stronger than expected print could further support gold prices as demand for the precious metal builds on concerns over faster price growth. Inflation data out of China on Sunday night may also impact prices with consensus estimates calling for CPI to ease to 1.9% from 2.0%. Should the data heighten the threat for a ‘hard landing’, gold may continue to ease in the near term as concerns regarding global growth prospects outweigh expectations for further central bank easing. Although Premier Wen Jiabao has called for additional monetary support from the PBoC, there has been no indication that the central bank is poised to do so and accordingly, the data may ultimately stoke fears for a ‘hard landing’ in the world’s second largest economy.

From a technical standpoint gold looks to have started a correction lower with critical near-term support seen at the confluence of key Fibonacci levels at $1739. Longer-term prospects remain bullish with only a break below this level invalidating our directional bias. Such a scenario risks declines to $1715 pivot level and the 61.8% Fibonacci extension taken from the December and May lows at $1693. We remain neutral at these levels while noting interim resistance at $1775 and the 100% extension at $1795. Daily RSI now looks poised for a test of the 50-mark with a break below this level suggesting that a more substantial correction may be underway. A breach back above the weekly high at 1780 looks to a test of the yearly highs at $1796 with subsequent topside targets eyed at $1840 and $1860. -MB

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

DISCLOSURES

News & Analysis at your fingertips.