Gold support is at $1,447 and $1,435.


As oil prices dropped dramatically yesterday (fuelled by concerns that higher oil prices would result in demand destruction, implying a deterioration in the global growth outlook), Gold tracked the rest of the commodities complex lower.

However, as the Asian markets opened this morning, some resilience was evident among the Gold, in particular gold and silver. This recovery from yesterday’s fall has been steady, although the complex is far from yesterday’s highs. A weaker dollar and a recovery in oil prices are providing support for gold and silver. As usual, it is silver which is benefiting the most, with large volumes indicating that technical buying is largely responsible for the gains. For PGM, sporadic demand has managed to lift prices, although this group still looks vulnerable. Eurozone industrial production for February, although disappointing expectations, has shown an improvement on January (7.3% y/y, compared to 6.3% y/y respectively).

The release of the Fed’s Beige book later today will most likely be closely watched. As highlighted before, markets will most likely focus on any signals that the Fed might be contemplating an early exit to its planned $600bn in monetary accommodation. To this end, signs of a strengthening US economy or rising inflation might darken the outlook for continued monetary accommodation and abundant global liquidity. Given the strong positive relationship between Gold and global liquidity, this could shake confidence in the complex, prompting some downside for prices.

Chinese money supply figures (including new yuan loans) are also scheduled for release this week. These might spark a knee-jerk sell-off in Gold should they reveal a slowdown in monetary expansion.

Gold support is at $1,447 and $1,435. Resistance is at $1,470 and $1,480.

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

Gold Price Futures (GC) Technical Analysis – Trader Reaction to Minor 50% Level at $1954.80 Sets the Tone

Image
  Gold futures closed lower on Thursday but up from its low of the session as investors battled a number of factors including U.S. economic data and outside market influences. Earlier in the session, gold fell over 1%, as positive economic data elevated hopes for a quick recovery while dampening the investment appeal of the precious metal. On Thursday, December Comex gold futures settled at $1937.40, down $11.60 or -0.60%. On the data front, a drop in U.S. jobless claims reported Thursday and positive manufacturing data reported earlier in the week are taking some shine off gold. A weaker Euro is also weighing on dollar-denominated gold by driving up thU.S. Dollar Index. U.S. weekly jobless claims fell below 1 million last week for the second time since the pandemic started, but did not signal a strong recovery in the labor market because the drop largely reflected a change in the methodology used to address seasonal fluctuations in data. Earlier in the week, a report s
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more