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. See our updated Privacy Policy here.

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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
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
Gold
Bearish
GBP/USD
Bearish
USD/JPY
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
More View more
Real Time News
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/ZDuee58Abe
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/niJL2W2yXV
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/0rNbbrd58e
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/zPzJAxBJxt
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/uf6KEYTes5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
  • #Gold prices put in a major breakout last month and, so far, buyers have held the line. But a really big Fed meeting is on the calendar for this week. Can Gold bulls hold? Get your market update from @JStanleyFX here: https://t.co/NGRTSfceOW https://t.co/QkSUORIQE2
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/PHK2sqB1jV
Gold Prices at 3-Month High amid USD Weakness after Big NFP Miss

Gold Prices at 3-Month High amid USD Weakness after Big NFP Miss

Margaret Yang, CFA, Strategist

GOLD PRICE OUTLOOK:

  • Gold prices extended higher after rising sharply following a weak nonfarm payrolls report
  • The DXY US Dollar declined to a 10-week low, buoying precious metal prices
  • The world’s largest gold ETF saw net inflows for the first time in months as bullion prices rebound

Gold prices registered a two-day gain of 2.5% and soared to above $ 1,830 mark on Monday as fears surrounding tapering Fed stimulus cooled. A much lower-than-expected US nonfarm payrolls print sent the DXY US Dollar index to a ten-week low, buoying precious metal prices.

Friday’s report showed that nonfarm jobs increased 266k in April, a far cry from market expectations of a 978k rise. March’s figures was revised down to 770k from 916k, underscoring a shortage in labor supply. This suggests that the job market may take longer to fully recover from the pandemic, and thus more time is needed for the Fed to consider tapering stimulus measures.

Meanwhile, a weaker jobs report also strengthened the prospect of fiscal spending. President Joe Biden said on Friday that his massive infrastructure and family support bills are “needed now more than ever” as job growth slowed in April. Earlier this year, Mr. Biden proposed a US$ 2.3 trillion infrastructure bill to revamp the nation’s transportation infrastructure and create millions of jobs.

The 10-year US treasury yield stabilized at around 1.59% after registering a “V-shaped” rebound on Friday. Gold prices are sensitive to yield changes. Therefore, reflation hopes may drive yields higher if Biden’s fiscal stimulus plan is approved, potentially derailing gold’s upward trajectory.

Looking ahead, traders will eye Wednesday’s US inflation data, which is forecasted to hit 3.6% YoY. Rising price levels may boost the appeal of gold, which is widely perceived as an inflation hedge. A slew of speeches by Fed officials this week will also be closely watched for clues about future monetary policy guidance.

Gold Prices vs. DXY US Dollar Index

Gold Prices at 3-Month High amid USD Weakness after Big NFP Miss

Source: Bloomberg, DailyFX

The world’s largest gold ETF - SPDR Gold Trust (GLD) – saw a small net inflow last week. This suggests that more buyers are returning to the bullion market after months of selling. The number of GLD shares outstanding increasing 2.9 million last week, compared to a net outflow of 1.6 million the prior week. Gold prices and the number of outstanding GLD shares have exhibited a strong positive correlation in the past (chart below). Therefore, a reversal of net redemption may be viewed as a bullish signal.

Gold Price vs. GLD ETF Shares Outstanding – 12 Months

Gold Prices at 3-Month High amid USD Weakness after Big NFP Miss

Source: Bloomberg, DailyFX

Technically, gold prices extended higher within an “Ascending Channel” after completing a “Double Bottom” chart pattern. This suggests that gold prices may have found a mid-term bottom at around $ 1,677 and since resumed its upward trajectory. An immediate support level can be found at $ 1,810 (the 50% Fibonacci retracement), whereas an immediate resistance level can be found at $ 1,851 (the 61.8% Fibonacci retracement).

The MACD indicator is trending higher above the neutral midpoint, underscoring upward momentum.

Gold PriceDaily Chart

Gold Prices at 3-Month High amid USD Weakness after Big NFP Miss

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

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

DISCLOSURES