Never miss a story from Rich Dvorak

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Rich Dvorak

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Gold Price Outlook Fixated on Trade War Risk, FOMC Minutes

GOLD PRICE OUTLOOK – TALKING POINTS

  • Gold has potential to rebound sharply from its recent stretch of weakness if looming risks intensify
  • XAUUSD might continue to face short-term weakness from the threat of recovering risk appetite and potentially hawkish Fed minutes
  • Read about How to Trade Gold or download the free DailyFX Q2 Gold Forecast for additional insight

On Thursday we highlighted how spot gold prices dropped from a 1-month high as yields rebounded along with risk appetite. Gold faced further weakness during Friday’s trading session as short-term interest rates climbed higher along with the US Dollar in response to a robust Consumer Sentiment report. Gold was subsequently dragged lower considering American consumers reportedly feel the most optimistic in 15 years with rebounding inflation expectations – a development that may help keep Fed rate cut prospects at bay.

GOLD PRICE (XAUUSD) CHART: 1-HOUR TIME FRAME (MAY 10, 2019 TO MAY 17, 2019)

Gold

The risk that markets are overpricing the probability that the Fed cuts rates this year could weigh negatively on gold if reversed. Wednesday’s release of the latest FOMC meeting minutes could trigger traders to develop a more hawkish perception of the Fed which would threaten XAUUSD due to the prospect of higher future interest rates. This in additional to weak gold chart technicals merges with the possible further weakness in the Chinese Yuan – all of which could serve as headwinds to gold.

Although, markets will likely obsess over US China trade war developments next week which will likely fuel risk appetite. Ultimately, this looks to largely dictate whether or not gold can catch a safe-haven bid from traders fleeing risk which could push XAUUSD higher.

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter