Gold Price (XAU) Talking Points:
- BoE and FOMC rate decisions and US NFPs dominate the landscape.
- Golden Week in Japan will drain liquidity in Asian hours.
The DailyFX Q2EUR Forecast is available to download including our short- and medium-term look at Gold.
Fundamental Forecast for Gold: Neutral
A very busy week ahead with the calendar packed full of market data and events across the globe. In addition, all next week, and the Monday after, Japan will be closed celebrating ‘Golden Week’ thinning liquidity in Asian hours, leaving markets vulnerable to ‘spike’ moves. In such conditions, gold would normally grab a bid but with the US dollar continuing to weigh on the precious metal, a neutral stance looks justified.
A look at the calendar below will show that there are a 28 ‘high importance’ data releases and events, all of which could change the risk landscape. A few highlights include, the latest interest rate decisions from the Bank of England and the Federal Reserve, the monthly US Labour report and various GDP and inflation releases across the Euro-Zone.
Gold has bounced off a multi-month low of $1,266/oz made this Tuesday but remains under pressure, primarily from a strong US dollar. The first look at Q1 GDP showed q/q growth of 3.2%, sharply higher than expectations around 2.3%, but the greenback has sold off going into the weekend after having made a fresh 23-month high earlier in the session. While some technical indicators suggest the US dollar is overbought, a bout of expectation-beating data could see the USD turn higher again, pushing gold lower. On the flip-side, dovish commentary from the FOMC meeting on Wednesday may prompt further profit-taking.
See our Gold Technical Forecast for relevant price zones and levels.
Gold Daily Price Chart – April 26, 2019
IG Client Sentiment data show 76.0% of traders are net-long gold. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests that gold prices may fall further.
Traders may be interested in two of our trading guides, especially in times of volatility – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.
--- Written by Nick Cawley, Analyst
To contact Nick, email him at firstname.lastname@example.org
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