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
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
Mixed
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
Bullish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.47% 🇨🇭CHF: 0.15% 🇯🇵JPY: 0.07% 🇳🇿NZD: -0.01% 🇪🇺EUR: -0.01% 🇨🇦CAD: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/q4ZpXSdMRj
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.03% US 500: -0.06% Wall Street: -0.12% France 40: -0.33% Germany 30: -0.44% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/hVv5Kb5odM
  • RT @nickgutteridge: Multiple EU sources this morning playing down the prospects of a Brexit deal today. Tomorrow is a possibility, they say…
  • Adds that "we are not there yet" on level playing field
  • EU Diplomat says same issues still outstanding in UK trade talks $GBP
  • Join @CVecchioFX 's #webinar at 6:30 AM ET/11:30 AM GMT for your weekly update on the world's most influential central banks. Register here: https://t.co/xCF8skC3Bz https://t.co/zAEcO2JECk
  • Dividend investing is the practice of investing in dividend-paying stocks. Why should you invest in dividend stocks? Find out: https://t.co/v8jRlj0OvP https://t.co/uSTZe6aiT6
  • 💶 Retail Sales YoY (OCT) Actual: 4.3% Expected: 2.7% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2020-12-03
  • 💶 Retail Sales YoY (OCT) Actual: 4.3% Expected: 2.7% Previous: 2.2% https://www.dailyfx.com/economic-calendar#2020-12-03
  • Crude Oil Prices May Rise on OPEC+ Deal, Lasting Gains Are Suspect - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/12/03/Crude-Oil-Prices-May-Rise-on-OPEC-Deal-Lasting-Gains-Are-Suspect.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #OOTT #opec #CrudeOil https://t.co/m30BRwOCL5
Gold Price Consolidates – Will FOMC Deliver a Break?

Gold Price Consolidates – Will FOMC Deliver a Break?

2016-04-23 00:23:00
Jeremy Wagner, CEWA-M, Head of Education
Share:
Gold Price Consolidates – Will FOMC Deliver a Break?Gold Price Consolidates – Will FOMC Deliver a Break?

Fundamental Forecast for Gold: Bearish

  • Gold prices continue a 2 month period of consolidation
  • Wednesday’s FOMC rate announcement could catalyze a break out
  • Watch retail trading sentiment through the announcement for directional clues

Gold prices continue to consolidate the gains from the beginning of the year as the yellow metal has traded sideways for 10 weeks. Gold is currently caught in a battleground of a low rate environment and rising risk assets with the US Dollar being the arbitrator.

First, nominal US 10 Year Treasury yields have traded sideways between 1.64% and 1.98% since February 11. Likewise, inflation in the US has steadily moved up near 1% YoY. This provides a backdrop for a low real interest rate environment which tends to favor higher gold prices.

The challenge with the current low interest rate environment is that we’re seeing rising risk assets, such as equities. Fed speculation on pushing out rate hikes has been the fuel for the rising risk assets. If other interest bearing or dividend paying instruments are strong, then Gold, which doesn’t pay any interest, may be left out in the cold. So we turn our attention to the Fed’s next move.

This week, the FOMC is set to meet on April 26-27. Fed fund futures suggest the next hike may came in the latter part of 2016. With US elections being held around that same time, we will likely see a void in movement by the Fed in 4Q 2016. Therefore, look for a rate hike to be pushed forward a couple of months, or pushed back into 2017.

As a result, the next move in Gold may predicate on how USDOLLAR behaves. If we see broad based weakening in the Buck on the back of a dampened Fed rate path outlook, then Gold may see a break higher out of the consolidation. On the other hand, if Yellen can beat the drum and point to a pre-US election rate hike, then USD may strengthen dragging Gold prices lower.

Gold Price Consolidates – Will FOMC Deliver a Break?

Retail sentiment towards Gold as measured through FXCM’s Speculative Sentiment Index (SSI) is stuck in neutral. SSI has ranged from -1.6 to +1.2 over the past few weeks. This is indicative of a range environment.

Friday’s break below $1244 opens the door for a range floor retest of $1191-$1206. We will want to keep an eye on SSI if price enters the range floor. Likewise, follow SSI for clues on the near term direction during Wednesday’s FOMC announcement. A falling SSI may indicate a bullish undertone while an increasing SSI may indicate a bearish undertone.

Follow SSI in real time here.

Interested in a longer term outlook for Gold, Equities, or USD? Download our 2Q 2016 forecast here.

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

DISCLOSURES