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...
Gold: two steps forward, one step back
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!
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
Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
The month of February saw markets make several instinctive moves as well as create opportunities for proper leveraging of fundamental releases. Despite being a leap-year, there wasn’t any real impact on price delivery in the course of the month. As we await the opportunities that lie ahead in the month of March, here are a few thoughts to consider.
USD/CHF saw a rebound after declining for two days straight, climbing towards the important psychological level of 0.8800 during Wednesday's early Asian trading session. There's some pressure on the Swiss Franc (CHF) as traders await the Swiss ZEW Survey – Expectations report scheduled for later today. Moreover, investors are keeping...
In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes reports...