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
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
Oil - US Crude
More View more
Real Time News
  • The USD may rise if the FOMC re-affirms its data-dependent approach and cools 2020 rate cut bets. US retail sales and CPI data may also give the Fed impetus to hold rates. Get your $USD market update from @ZabelinDimitri here: https://t.co/XnDITaDOox https://t.co/A480uVMqF2
  • What tools does the ECB have left to stimulate the Eurozone? Where is the #Euro heading? Find out from Chief Eurozone Economist at Pantheon Macroeconomics Claus Vistesen only on Trading Global Markets Decoded #podcast hosted by @MartinSEssex here:https://t.co/Twr44cZ1GB https://t.co/DXlDH5Cp9e
  • The price of oil extends the advance from the October low as #OPEC and its allies pledge to take additional steps to balance the energy market. Get your crude #oil market update from @DavidJSong here: https://t.co/llGq8yPFH4 #OOTT https://t.co/1OCVOIrK98
  • Gold closed lower after paring early-week gains post-NFP on Friday. But will price finally break support? These are levels that matter on the XAU/USD weekly chart. Get your gold technical analysis from @MBForex here: https://t.co/ovGheRg4MQ https://t.co/ZEQSYktj0w
  • What is your #tradingstyle? Take the quiz and let us know: https://t.co/LPBOcS0Vtd https://t.co/l6FvtcADEH
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia from @DavidCottleFX here: https://t.co/E2hqoRdO7q https://t.co/dnrAMFK4U2
  • Geopolitical developments send #oil prices soaring or falling. Get your market update from @MartinSEssex here:https://t.co/XVXLyG8vjq #OOTT https://t.co/RMk5Eb5fLU
  • Negative yielding government bonds – What are they telling us? Find out from @nickcawley1 here: https://t.co/F6JuhmrvPT https://t.co/KdpSjQSJ8F
  • #Euro area stocks may be preparing to break the four-month uptrend built around hopes for a US-China trade deal and an orderly #Brexit outcome. Get your market update from @IlyaSpivak here: https://t.co/ujlCJiXLvh https://t.co/INdFtsrTTF
  • What is the top market moving theme for the coming week? I disagree with the majority. '$EURUSD, $GBPUSD and $AUDUSD Top Volatility Candidates With #Fed, #Election, #TradeWar' https://www.dailyfx.com/forex/video/daily_news_report/2019/12/07/EURUSD-GBPUSD-and-AUDUSD-Top-Volatility-Candidates-On-Fed-Election-Trade-War.html?CHID=9&QPID=917719 https://t.co/Q1dbZVN5Us
Gold Prices May Rise if USD Sinks, US Data Fuels Fed Rate Cut Bets

Gold Prices May Rise if USD Sinks, US Data Fuels Fed Rate Cut Bets

2019-05-25 19:00:00
Daniel Dubrovsky, Analyst

Gold Price Fundamental Forecast: Bullish

  • Gold prices capitalized on dismal US PMI figures as US Dollar sunk
  • XAU/USD may gain in the short-run on more disappointing US data
  • Possibility of US Dollar gains in the medium-term may subdue gold

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 in rather mute trade until a sudden surge of volatility on Thursday sent the precious metal rallying. Looking at the XAU/USD 4-hour chart below, we can see that it rallied at the expense of the S&P 500, US Dollar and local front-end government bond yields. This kind of trading dynamic reflected increased Fed rate cut expectations on a dismal set of US PMI data.

Gold Rises as US PMI Data Sinks USD and Bond Yields

Gold Prices May Rise if USD Sinks, US Data Fuels Fed Rate Cut Bets

Chart Created in TradingView

Gold Week Ahead

Gold’s sensitivity to unison behavior in the Greenback, S&P 500 and bond yields underscores its anti-fiat appeal rather than as a safe-haven asset. The yellow metal has no interest-bearing qualities, which are what typically give currencies their appeal. As an example, last week we saw the Australian Dollar accelerate its depreciation on the buildup of RBA dovish expectations which lead to a 90% probability that we may get a cut in June.

With that in mind and using last week as an example, the impetus for additional gains in gold prices depends mostly on how far Federal Reserve rate cut expectations can go. As a reminder, the central bank has reiterated its data-dependent stance. To that end, there are plenty of opportunities such as US consumer confidence and GDP data to impact the Fed’s outlook on US economic growth prospects. Not to mention that we will also get the central bank’s preferred measure of inflation, core PCE.

The US Citi Economic Surprise Index is negative and has been so since around the middle of February. This does suggest that economists’ are overestimating the health and vigor of the economy, leaving data vulnerable to disappointment in the coming week. Having said that, data in the US has been tending to fall short by increasingly smaller margins since the beginning of this month.

While in the short-run this may support gold, gains in the highly-liquid US Dollar during times of aggressive risk aversion can counter this and should not be discounted. The reason why this is prominent is because of the increase in US-China trade war fears seen as of late. The latter nation seems keener this time around to stand its ground, calling out the other side for leading to the stall in talks with the world’s-largest economy.

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

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


News & Analysis at your fingertips.