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
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
Mixed
GBP/USD
Bullish
USD/JPY
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
More View more
Real Time News
  • #Gold saw its worst performance the past 5 days in 5 months as longer-dated government bond yields in developed countries rose Could this be the beginning of a turning point in #XAUUSD? https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/08/15/Gold-Price-Outlook-Will-XAUUSD-Brush-off-Worst-Week-in-5-Months.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/x2Indk3b7P
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/PT09ZsIOCa
  • The US #Dollar may rise, buoyed by haven demand as fiscal stimulus talks stagnate and swelling tensions between Washington and Beijing sink trade talks. Get your #currencies update from @DanielGMoss here: https://t.co/Wcw9PDUr67 https://t.co/gnYZYl6aLV
  • Upside in #CrudeOil struggling ahead of #OPEC meeting. Cartel likely to maintain wait and see approach. Get your #commodities update from @JMcQueenFX here: https://t.co/gNHHKoTUzm https://t.co/eF40DRIBJ5
  • #Gold had some big moves last week, and while vol is expected to die down a bit, it will be important to see if gold can hold its ground in the coming days/weeks. Get your #metals update from @PaulRobinsonFX here: https://t.co/N8a84hRnHN https://t.co/3fjodPHTDm
  • The S&P 500's refusal to hit a record and Dollar's anchor to range this past week is sign of summer liquidity conditions, but the quiet is not insurmountable. 'S&P 500 Record and Dollar Break Look to Stimulus and Trade to Override Seasonality' https://www.dailyfx.com/forex/video/daily_news_report/2020/08/15/SP-500-Record-and-Dollar-Break-Look-to-Stimulus-and-Trade-to-Override-Seasonality-.html https://t.co/mbvPkdQfYl
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkcMZBK https://t.co/kFk6ccU3Sk
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/aXSB0bG3y0
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/1G7CRsegRX https://t.co/i342ipPuvW
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here:https://t.co/Fkzk88Y5gm https://t.co/tHp0Nb3Tr5
Gold Prices Move Lower After Blowout NFP Stokes Dollar Strength

Gold Prices Move Lower After Blowout NFP Stokes Dollar Strength

2016-08-05 22:34:00
James Stanley, Strategist
Share:
Gold Prices Move Lower After Blowout NFP Stokes Dollar Strength

Fundamental Forecast for Gold:Neutral

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Last week ended with another bump higher in Gold prices as an abysmal U.S. GDP print brought to question the prospect of any near-term rate hikes out of the Federal Reserve. But just a week later, we’ve seen a fairly brisk reversal of that thesis after a blowout NFP report on Friday elicited a quick burst of U.S. Dollar strength that permeated through global markets. Gold was not left unfettered, as gold prices put in an outsized-reversal lower after the announcement, falling by -1.7% on the day.

But the longer-term up-trend in Gold is still very much intact: Gold prices are up 26% on the year, even including this most recent retracement; and as has been widely publicized this is very much on the back of a Federal Reserve that continues to support markets with dovish policy. So the big question when setting up directional biases on Gold is when the Federal Reserve might begin talking up higher rates again? Now this doesn’t necessarily denote that a hike may be nearing, merely that the Fed is exploring the prospect of tighter policy options. This would be similar to what markets felt in May as the Fed talked up ‘2-3 hikes in 2016,’ or more specifically, speaking of potential hikes at their next meeting in June; which created USD-strength and brought a greater-than $100 retracement in Gold prices throughout the month of May.

After last Friday’s GDP print came in so far below expectations, the prospect of higher rates out of the U.S. diminished mightily. But after this morning’s NFP report came in far beyond what markets were looking for, the fear of a slightly-more-hawkish Fed has driven the Dollar higher, pulling down Gold prices to find support near prior price action resistance in the $1,335-area of the chart.

This is a theme that could have near-term staying power. With U.S. equity markets at all-time highs, with some U.S. data still showing significant strength and with global markets resting so firmly on the expectation that the Fed won’t be making any near-term moves, only a slight increase in rate-hike expectations for September or even December as driven by positive U.S. data could provoke an extension of Dollar strength. Given the prior pattern of the Federal Reserve talking up tighter policy as equity markets rallied to fresh highs, the possibility for such a scenario certainly exists at the moment. Even the fear of such a situation could be enough to continue softening Gold prices.

So while the bigger-picture up-trend in Gold remains extremely attractive, timing is of the upmost importance as the trend-side moves higher have been quick and violent; often found around negative data points alluding to the prospect of ‘looser for longer.’ And while this can happen on any given data point, next week is simply devoid of the type of schedule that will often allow for such a move. There are no Fed speakers on tap, and outside of Chinese CPI on Monday and RBNZ on Tuesday, the economic calendar is lacking any ‘high impact’ announcements until we get to Friday’s batch of European GDP numbers.

More interesting for the long-Gold thesis is the Jackson Hole Summit scheduled for August 25th-27th. This is when the foremost economic minds will meet in Wyoming to discuss global economic issues. This will include numerous Central Bankers from the U.S. and international Central Banks, finance ministers, academics and many other financial market participants. Given that many economies around the world are struggling with similar issues, with few Central Banks wanting capital flows driving the value of their currency higher, this represents an interesting opportunity for Gold bulls.

As we move into next week with a light economic calendar ahead, the forecast for Gold prices will remain at neutral.

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

DISCLOSURES

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.