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
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
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
Mixed
Gold
Mixed
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: France 40: -0.26% US 500: -0.33% Wall Street: -0.35% Germany 30: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/eDYtqwsUTc
  • Nebraska Department of Agriculture says China agriculture delegation cancels US farm visit to Nebraska according to RTRS #Tradewar $SPX
  • New Montana tourism campaign slogan: 'Visit Montana or the markets will drop. It's Time.' https://t.co/HemCbRKFIP
  • The MSCI #EmergingMarkets index down to session lows, covering the upside gap attained at Friday's market open as risk aversion engulfs financial markets in the wake of China's delegation team cancelling a farm trip to Montana. Will this bode ill for ongoing talks? #TradeWars https://t.co/AfeI8sL1mx
  • Anti-fiat #Gold prices at session highs as US government bond yields tumble following Chinese delegation team canceling farm trip in Montana #TradeWars https://t.co/byTaNE763d
  • 🇺🇸 (USD) Baker Hughes U.S. Rig Count (SEP 20), Actual: 868 Expected: 881 Previous: 886 https://www.dailyfx.com/calendar?utm_source=Twitter&utm_medium=TweetRobot&utm_campaign=twr
  • Big move on $SPX this afternoon on news that China trade officials have cancelled Montana visit https://t.co/rm6nZrFCbK
  • Sentiment deteriorating after Reuters report that the China delegation team cancels a visit to a farm in Montana, with officials set to return back to China sooner. #SP500, #AUDUSD, #NZDUSD and #USDJPY hitting session lows https://t.co/2du2JORtZ8
  • #Gold prices are in consolidation just below long-term trend resistance. Get your $gld technical analysis from @MBForex here:https://t.co/e0dOvLqpaY $XAUUSD https://t.co/Q7LFeIOWD2
  • RT @SkyNews: Brexit: Leaked document says UK proposal fails to solve backstop issues https://t.co/zpUcy0sDOI
Gold Breakout Imminent- Will US GDP Be the Trigger?

Gold Breakout Imminent- Will US GDP Be the Trigger?

2014-05-23 22:44:00
Michael Boutros, Technical Strategist
Share:

Gold Breakout Imminent- Will US GDP Be the Trigger?

Fundamental Forecast for Gold: Neutral

Gold prices are virtually unchanged on the week with prices off by a mere 0.1% to trade at $1291 ahead of the New York close on Friday. Prices have continued trade within a tight range despite ongoing strength in the US dollar and broader equity markets. Nevertheless, gold remains at a critical juncture and the technical picture continues to suggest that a break of a multi-week consolidation pattern is imminent as we head into the close of May trade.

In light of the recent strong demand for US Treasuries, it’s disconcerting that although gold has largely moved in tandem Treasuries since the start of the year, it has been unable to participate in the bond rally since April. This condition suggests that the gold market remains vulnerable in the near-term and with the long bond coming off key near-term resistance at the 61.8% retracement from the decline off the 2012 record highs, further weakness in Treasuries could put added downside pressure on gold prices.

Looking ahead, the preliminary 1Q GDP print highlights the biggest event risk for the week ahead with consensus estimates calling for a downward revision to reflect an annual contraction of 0.5% q/q. With that said, a dismal growth read may dampen the appeal of the US Dollar and spur increased demand for gold as interest expectations get pushed out. Watch for developments in the bond market and the greenback for guidance with the recent price action in gold warning of a decisive move heading into the monthly close.

From a technical standpoint, our outlook remains unchanged from last week. “Gold has continued to trade into the apex of a multi-week consolidation pattern off the April highs and a break-out ahead of the May close is in focus. A break below 1260/70 is needed to put the broader bearish trend back into play targeting $1216/24 and the 2013 lows at $1178. Interim resistance and our near-term bearish invalidation level stands at $1307/10 with a move surpassing $1327/34 shifting our broader focus back to the long-side of gold. Bottom line: look for a decisive break of this pattern next week with a move surpassing the May opening range to offer further clarity on our medium-term directional bias. The broader outlook remains weighted to the downside sub $1334. -MB

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

DISCLOSURES

News & Analysis at your fingertips.