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
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
Oil - US Crude
Mixed
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
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/C5IvlNHcIM
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.06% 🇪🇺EUR: 0.03% 🇯🇵JPY: -0.02% 🇨🇦CAD: -0.15% 🇳🇿NZD: -0.55% 🇦🇺AUD: -0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/j13v1Oegep
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 2.05% France 40: 1.52% Germany 30: 1.35% Wall Street: 0.78% US 500: 0.47% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/LpQJXgdHxM
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/YAtLZ9lqNi
  • EU's Barnier says he remains determined for a Brexit deal $GBP
  • 🇬🇧 Markit/CIPS Composite PMI Flash (SEP) Actual: 55.7 Expected: 56.3 Previous: 59.1 https://www.dailyfx.com/economic-calendar#2020-09-23
  • 🇬🇧 Markit/CIPS UK Services PMI Flash (SEP) Actual: 55.1 Expected: 56 Previous: 58.8 https://www.dailyfx.com/economic-calendar#2020-09-23
  • 🇬🇧 Markit/CIPS Manufacturing PMI Flash (SEP) Actual: 54.3 Expected: 54.1 Previous: 55.2 https://www.dailyfx.com/economic-calendar#2020-09-23
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/txgNCgB5Y8
  • Heads Up:🇬🇧 Markit/CIPS Composite PMI Flash (SEP) due at 08:30 GMT (15min) Expected: 56.3 Previous: 59.1 https://www.dailyfx.com/economic-calendar#2020-09-23
Gold Price Forecast: Bullish Momentum Abates Ahead of Powell Testimony

Gold Price Forecast: Bullish Momentum Abates Ahead of Powell Testimony

2019-07-08 07:30:00
David Song, Strategist
Share:

Gold Price Talking Points

Gold attempts to retrace the decline following the US Non-Farms Payroll (NFP) report, but the price of bullion may face a larger pullback ahead of the semi-annual testimony with Federal Reserve Chairman Jerome Powell as the bullish momentum abates.

Gold Price Forecast: Bullish Momentum Abates Ahead of Powell Testimony

The recent rebound in the price of gold appears to be have stalled ahead of the yearly-high ($1439), and the precious metal stands at risk for a larger correction as fresh data prints coming out of the US economy deter bets for a rate easing cycle.

Image of DailyFX economic calendar

The 224K expansion in US employment undermines the shift in forward guidanceas the economy shows little signs of a looming recession, and the development may generate a growing dissent within the Federal Open Market Committee (FOMC) as “the baseline outlook remains favorable.”

In turn, market participants may pay increased attention to the semi-annual testimony with Chairman Powell as “many FOMC participants now see that the case for a somewhat more accommodative policy has strengthened,” and recent remarks from the 2019-voting members suggest the central bank is on track to implement an “insurance cut” as the US and China struggle to reach a trade deal.

Image of Fed Fund futures

Keep in mind, Fed Fund futures continue to reflect a 100% probability for at least a 25bp reduction at the next interest rate decision on July 31, but it remains to be seen if the FOMC will reverse the four rate hikes from 2018 as eight Fed officials project a lower trajectory for the benchmark interest rate.

With that said, upcoming changes at the Federal Reserve should keep gold prices afloat amid the threat of a policy error, and the precious metal stands at risk of exhibiting a more bullish behavior in the second half of 2019 especially as President Donald Trump tweets “we need rates cuts, & easing.

However, recent price action raises the risk for a larger pullback as the rebound from the start of the month fails to spur a run at the yearly-high ($1439), with the Relative Strength Index (RSI) highlighting a similar dynamic as the oscillator falls back from overbought territory.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

Gold Price Daily Chart

Image of gold daily chart
  • The broader outlook for gold is no longer mired by a head-and-shoulders formation as both price and the Relative Strength Index (RSI) break out of the bearish trends from earlier this year.
  • However, the near-term rally in bullion appears to have stalled ahead of the Fibonacci overlap around $1444 (161.8% expansion) to $1457 (100% expansion) as the RSI falls back from overbought territory, with the oscillator flashing a textbook sell-signal as it crosses below 70.
  • In turn, a break/close below the $1380 (100% expansion) to $1385 (78.6% expansion) region raises the risk for a move back towards $1358 (78.6% expansion) to $1360 (61.8% expansion), with the next area of interest coming in around $1340 (61.8% expansion) to $1342 (50% expansion), the former-resistance zone.

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

Additional Trading Resources

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