Gold Price Analysis and Talking Points:
- Bulls Eye Fed Meeting
- Speculative Positioning Suggests Bullish Outlook
See our quarterly gold forecast to learn what will drive prices through mid-year!
Bulls Eye Fed Meeting
The topside breakout in gold had been somewhat short-lived after failing to consolidate at its best levels since July. Focus this week will be on the Fed meeting, whereby a less hawkish stance could provide a catalyst to propel gold prices higher towards resistance at $1262. While it is expected that the Fed will deliver a 4th rate hike, questions have been raised on how many more hikes the Fed will deliver in 2019. Particularly given the increased stock market fluctuations and deteriorating fundamental backdrop. As it stands, the dot plot projection suggests 3 rate hikes in 2019, however, FFR futures pricing imply as much as 40bps of tightening from now until the end of 2019.
Speculative Positioning Suggests Bullish Outlook
Speculative positioning via the CFTC continues to suggest that the outlook for gold is bullish, albeit in the medium/long term. While an unwind in short gold positioning has kept the precious metal firm, the fact that long positions have not increased, suggests that a lasting breakout on the topside may not be on the table in the short term.
What You Need to Know About the Gold Market
GOLD PRICE CHART: Daily Time-Frame (Feb-Dec 2018)
Resistance 1: 1253 (200DMA)
Resistance 2: 1262 (50% Fib Level)
Support 1: 1238 (38.2% Fib level)
Support 2: 1208 (23.6% Fib level)
GOLD TRADING RESOURCES:
- See our quarterly gold forecast to learn what will drive prices through mid-year!
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
