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.

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
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
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.57% Wall Street: -0.90% US 500: -0.91% France 40: -0.98% Germany 30: -1.49% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/MtIrqoITpz
  • #Euro Outlook: Covid-19 Second Wave to Weigh on $EURJPY, $EURUSD - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2020/10/26/Euro-Outlook-Covid-19-Second-Wave-to-Weigh-on-EURJPY-EURUSD-.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr https://t.co/zLU4HOLcHE
  • Commodity currencies underperformed after House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows accused each other of "moving the goalposts" on stimulus legislation on Sunday - Bloomberg AUD/USD -0.35% CAD/USD - 0.29% NOK/USD - 0.45%
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/PkokcJCGxp
  • Some massive surges in Covid-19 cases worldwide: The US (+78,702 on Oct 24) France (+ 52,013 on Oct 25) Spain (+ 19,851 on Oct 23) UK (+ 19,790 on Oct 25) Germany (+ 11,176 on Oct 24) A virus resurgence dampened sentiment, weighing on equities, oil and growth-linked currencies.
  • Market Update Risk-off tilt persisting throughout APAC trade $USD gaining against all its major counterparts, with the cyclically-sensitive $AUD and $CAD the biggest underperformers #SP500 continuing to grind lower alongside #crudeoil, #gold and Australia's #ASX200
  • 🇯🇵 Leading Economic Index Final (AUG) Actual: 88.4 Expected: 88.8 Previous: 86.7 https://www.dailyfx.com/economic-calendar#2020-10-26
  • - British Pound braces for #Brexit as political volatility rattles GBP crosses - Australian Dollar traders closely eyeing Chinese Plenum and 5-year plan - #Euro, US Dollar price action may pick up on upcoming WTO tariff ruling https://www.dailyfx.com/forex/fundamental/article/special_report/2020/10/26/GBP-AUD-USD-Volatility-to-Swell-on-Cross-Continental-Geopolitical-Risks.html
  • Heads Up:🇯🇵 Leading Economic Index Final (AUG) due at 05:00 GMT (15min) Expected: 88.8 Previous: 86.7 https://www.dailyfx.com/economic-calendar#2020-10-26
  • Heads Up:🇯🇵 Coincident Index Final (AUG) due at 05:00 GMT (15min) Expected: 79.4 Previous: 78.3 https://www.dailyfx.com/economic-calendar#2020-10-26
Gold Price Outlook Hinges on Fed Rhetoric, US NFP Report

Gold Price Outlook Hinges on Fed Rhetoric, US NFP Report

2019-08-31 22:00:00
David Song, Strategist
Share:
Gold 2 Hour Price Chart

Gold Price Talking Points

Fresh developments coming out of the US are likely to influence the price of gold amid overwhelming expectations for a Federal Reserve rate cut in September.

Fundamental Forecast for Gold: Neutral

The price of gold climbed to a fresh yearly high ($1555) during the last full week of August amid growing tensions between the US and China, and the escalating trade war may force the Federal Reserve to further insulate the economy as President Donald Trump tweets that the “Fed has been calling it wrong for too long.

FED Target Rate Probabilities

As a result, Fed Fund futures show a greater than 90% probability for a 25bp reduction on September 18, but little signs of a looming recession may spur a greater dissent within the Federal Open Market Committee (FOMC) as the Atlanta Fed GDPNow model now projects the US economy to expand 2.3% in the third quarter of 2019 compared to 2.2% on August 16.

Moreover, recent remarks from Chairman Jerome Powell suggest the Fed is in no rush to embark on a rate easing cycle as monetary policy “cannot provide a settled rulebook for international trade,” and upcoming remarks from Boston Fed President Eric Rosengren, New York Fed President John Williams and Chicago Fed President Charles Evans, all 2019-voting members on the FOMC, may impact financial markets as the central bank comes under pressure to reverse the four rate-hikes from 2018.

With that said, it remains to be seen if the US Non-Farm Payrolls (NFP) report will spur a meaningful reaction amid overwhelming expectations for back-to-back Fed rate cuts, and a positive development may stoke fears of a policy error as Fed officials project a lower trajectory for the benchmark interest rate.

In turn, market participants may search for an alternative to fiat currencies, and falling US Treasury yields along with the inverting yield curve are likely heighten the appeal of gold as the US-China trade war appears to be a spurring a flight to safety.

Gold Price Daily Chart

XAUUSD Daily Price Chart

Source: Trading View

Keep in mind, the broader outlook for gold prices remain constructive as both price and the Relative Strength Index (RSI) clear the bearish trends from earlier this year.

Moreover, gold has broken out of a near-term holding pattern following the failed attempt to close below the $1402 (78.6% expansion) region, with the RSI still tracking the bullish formation from April.

However, the failed attempts to close above $1554 (100% expansion) may generate a short-term pullback in the price of gold as the RSI struggles to push back into overbought territory, with a break/close below the Fibonacci overlap around $1509 (61.8% retracement) to $1517 (78.6% expansion) raising the risk for a move towards $1488 (61.8% expansion).

Additional Trading Resources

For more in-depth analysis, check out the 3Q 2019 Forecast for Gold

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES