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
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
  • The week saw a slightly more dovish than expected RBA minutes increase the importance of the latest labour market report, which showed an uptick in the unemployment rate to 5.3%. Where is $AUDUSD heading? Find out from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/gmGjlGBvjv
  • #OOTT https://t.co/TLgP7dUqFv
  • #Silver’s recent bull run may have run its course in the short-term with the sharp sell-off from the September 4 high print at $19.66/oz.Where is Silver heading? Get your market update from @nickcawley1 here: https://t.co/oVAZ4wPR7z https://t.co/1LvLXmqnwx
  • RT @Frances_Coppola: NY Fed thinks reserve hoarding by a small number of banks caused the repo tantrum. Question is, why are they hoarding…
  • Gold Prices Weekly Technical Forecast, Finding Upside Commitment? #GoldPrice #XAUUSD #Gold - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/09/20/Gold-Prices-Weekly-Technical-Forecast-Finding-Upside-Commitment.html?utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/CgaaEzb2li
Gold Price Outlook Bearish as USD May Rise on Soft Econ Data, RBA

Gold Price Outlook Bearish as USD May Rise on Soft Econ Data, RBA

2019-03-30 16:00:00
Daniel Dubrovsky, Analyst
Share:

Gold

Gold Price Fundamental Forecast: Bearish

  • Gold prices’ inverse link to the US Dollar has strengthened recently
  • US econ. data may underperform, fueling risk aversion as gold sinks
  • Hazards for the yellow metal also include more dovish RBA, Brexit

Looking for a technical perspective on the Gold? Check out the Weekly Gold Technical Forecast.

Trade all the major global economic data live and interactive at the DailyFX Webinars. We’d love to have you along.

Gold prices spent most of last week declining, with the commodity dropping almost 1.5 percent in its worst single-day performance since the beginning of March on Thursday. The anti-fiat precious metal, thanks to a lack of interest-bearing qualities, inversely tracked the US Dollar. At one point, it even weakened alongside a pullback in the S&P 500. This undermined its often-associated trait as a safe haven.

Lately, XAU/USD has been tending to be more sensitive to movements in the Greenback. Looking at the chart below, the yellow metal fell despite a deterioration in front-end government bond yields from developed countries such as the United States and Germany. Simultaneously, its correlation with DXY has been becoming increasingly inverse since the end of February.

Gold Versus Developed Nation 2-Year Government Bond Yields and US Dollar

Gold VS DXY & 2Yr Goveremnt Bond

Chart Created in TradingView

Gold Week Ahead

With that in mind, gold prices will be closely watching what could impact the US Dollar in the week ahead, and there is much to anticipate. Ahead, data such as US retail sales, durable goods and the latest non-farm payrolls report are on the docket. The Federal Reserve is currently in wait-and-see mode as it cooled expectations of two hikes for this year. Can those odds be revived?

The Citi surprise index seems to suggest otherwise. Data has been tending to increasingly underperform in the world’s-largest economy, hinting that more downside surprises could be in store ahead. This was largely the case this past week. It should be noted that Fed funds futures are pricing in about a 70% chance of a hike for this year. Yet, the US Dollar has held up remarkably well all things considered.

If US equities suffer on fears of economic growth slowing on dismal domestic economic statistics, the Greenback may receive a lift. Aggressive risk aversion often diverts investors into the world’s most liquid asset. Another source of uncertainty could come from the RBA given that the RBNZ recently announced that it favors a cut as its next move. If the former follows suit, USD could rally, pressuring the metal.

Gold may move inversely to USD, but the direction of government bond yields should still be taken into account. Let’s not forget that gold’s rise since the latter half of 2018 tracked a flattening in a closely-watched section of the US yield curve before it eventually inverted on March 22. Brexit also remains a wildcard for sentiment. Given these numerous risks, gold bulls ought to proceed with caution.

Gold Trading Resources:

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

Other Weekly Fundamental Forecast:

Crude Oil Forecast – Crude Oil May be Overextended, But Watch Out For Trade Headlines

British Pound Forecast – GBP/USD Rate Threatens Bull Trend Ahead of Brexit Deadline

US Dollar Forecast – US Dollar May Rise as Sentiment Succumbs to Potent Headwinds

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

DISCLOSURES

News & Analysis at your fingertips.