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
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Bullish
GBP/USD
Bullish
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
USD/JPY
Bearish
More View more
Breaking news

Chinese PMI Data Beats Estimates. Manufacturing 52.0, Est 44.8, Non-Manufacturing: 52.3, Est 42.0

Real Time News
  • You can't see it, but I have a seriously dubious look on my face https://t.co/vOEfdaHwyg
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.18% 🇦🇺AUD: -0.13% 🇨🇦CAD: -0.22% 🇪🇺EUR: -0.27% 🇬🇧GBP: -0.69% 🇯🇵JPY: -0.70% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XyAyUgqavm
  • LIVE NOW! APAC Head Strategist @IlyaSpivak discusses the technical and fundamental $AUDUSD outlook for the week ahead here - https://www.dailyfx.com/webinars/378612179?CHID=9&QPID=917720&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.82%, while traders in US 500 are at opposite extremes with 72.90%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/el9cpkaZNX
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/W3zdKcvSCJ
  • LIVE IN 30 MIN: APAC Head Strategist @IlyaSpivak discusses the technical and fundamental $AUDUSD outlook for the week ahead here - https://www.dailyfx.com/webinars/378612179?CHID=9&QPID=917720&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • RT @DanielGMoss: Spontaneous spike prior to Chinese #PMI releases Strong results compared to previous record lows Non-manufacturing: 52.…
  • China's NBS: Production hasn't recovered to normal level before outbreak -BBG
  • NBS: Rebound in China PMI doesn't mean economy is back to normal. March PMI alone can't tell improving trend -BBG
  • #AUDUSD trading slightly higher after Chinese PMI was released, though prior to the publication the pair briefly plummeted 1.5% before recovering https://t.co/n6bS5DtEpT
Gold Price Consolidates as Fed, RBNZ Implement Emergency Rate Cut

Gold Price Consolidates as Fed, RBNZ Implement Emergency Rate Cut

2020-03-16 06:00:00
David Song, Strategist
Share:

Gold Price Talking Points

The price of gold struggles to extend the series of lower highs and lows from the previous week as the Federal Reserve delivers another emergency rate cut, and the precious metal may consolidate over the coming days as the global community of central banks stand ready to deploy unconventional tools to combat the coronavirus.

Gold Price Consolidates as RBNZ, FOMC Implement Emergency Rate Cut

The recent pullback in the price of gold appears to be sputtering as the Federal Open Market Committee (FOMC) implements a zero-interest rate policy (ZIRP), with the central bank planning to boost its holding of Treasury securities and mortgage-backed securities (MBS) in order to “support the smooth functioning of markets.”

The announcement comes after the Reserve Bank of New Zealand (RBNZ) delivers an emergency rate cut and reduces the official cash rate (OCR) by 75bp to a record-low of 0.25%, with Governor Adrian Orr and Co. indicating that a “Large Scale Asset Purchases of New Zealand Government bonds were the next best monetary tool available to the Committee.”

It remains to be seen if the efforts will cushion the world economy from the shock to the global supply chain, and it seems as though major central banks will deploy unconventional tools to combat the coronavirus amid the weakening outlook for growth.

With that said, the price of gold may continue to benefit from the low interest environment as market participants look for an alternative to fiat-currencies, and the broader outlook for bullion remains constructive as the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) helped to rule out the threat of a Head-and-Shoulders formation.

Gold Forecast
Gold Forecast
Recommended by David Song
Download the 1Q 2020 Forecast for Gold
Get My Guide

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 price daily chart

Source: Trading View

  • The opening range for 2020 instilled a constructive outlook for the price of gold as the precious metal cleared the 2019 high ($1557), with the Relative Strength Index (RSI) pushing into overbought territory during the same period.
  • A similar scenario materialized in February, with the price of gold marking the monthly low ($1548) during the first full week, while the RSI broke out of the bearish formation from earlier this year to push back into overbought territory.
  • However, the price of gold has failed to maintain the monthly opening range for March after trading to a fresh yearly high ($1704), with the Relative Strength Index (RSI) signaling a potential change in gold price behavior as the oscillator deviates with price and snaps the upward trend carried over from last year.
  • In turn, the price of gold may continue to consolidate over the coming days, but a break/close below the $1558 (38.2% expansion) to $1567 (161.8% expansion) region may open up the Fibonacci overlap around $1509 (61.8% retracement) to $1515 (23.6% expansion).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- 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

News & Analysis at your fingertips.