2020-08-31 • Updated
The yellow metal has loosened its’ previous steam, but some analysts believe it may rally again. What may underpin gold?
To begin with, the recent Fed’s statement influenced the whole Forex market and, especially, gold. US authorities allowed inflation and employment to run above standard levels, indicating that interest rates will remain near zero for longer. As a result, it makes the low-yielding US dollar less favorable for investors. Most of the time the depreciation of the USD leads to the appreciation of gold, as it reduces the alternative cost of holding non-yielding bullion. In other words, the US dollar loses its main advantage over gold, when interest rates are low.
Nevertheless, traders are not in a hurry to buy the metal. Perhaps, they believe more in the potential of silver amid the technological boom due to its’ industrial application. By the way, silver rose by 14% in August, while gold contracted by 0.25%. Coming back to gold, the current risk-on movement may add some headwinds to it, undermining its safe-haven position. The market mood improved today after the better-than-expected Chinese PMI data. As you may know, investors use Chinese economic indicators as an initial assessment of how fast the global economy may recover. Therefore, today’s optimistic release combined with vaccine developments cheered investors up.
However, according to FXTM: “Gold will continue to be one of the best beneficiaries of the dollar’s weakness so expect to see a retest above $2,000 in the upcoming weeks”.
XAU/USD has approached the key resistance of $1 975, which it has failed to cross a few times. The move above this level will drive the price to the psychological mark of $2 000. In the opposite scenario, if the yellow metal slumps below the low of August 28, the way to the next support of $1 930 will be open. Follow further news on gold and catch the market movement!
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Bearish Scenario: Sales below 80.00 with TP1: 79.34, TP2: 78.94, TP3: 78.55, and 78.00 Bullish Scenario: Buys above 78.00 (wait for a retracement to the zone) with TP: 79.34 TP2: 80.00, and TP3: 81.00
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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