Trump Trade Uncertainty Returns
Gold prices are enjoying a perfect storm of bullish drivers currently. The futures market has been in firm ascent over the last month and shows no signs of slowing down as price continues to print fresh record highs today. A combination of dovish Fed expectations and fresh uncertainty over US/China trade is seeing demand for the yellow metal surging higher. A return to hostile trade rhetoric between the US and China has sparked a pullback in risk assets which is feeding into higher gold prices here and looks set to continue near-term while tensions remain elevated.
Dovish Powell Comments
Yesterday, Fed chairman Powell sparked fresh selling interest in USD as he warned that the bank was nearing a point when QT would be brought to an end. Powell signalled that such a move would likely become appropriate in the coming months given the growing risks to the labour market and the need for greater economic support. Powell explained that the bank had been in a difficult position due to the strength of the labour market earlier in the year, and residual inflationary risks. However, with the labour market having suffered a sharp downturn in recent months, risks have fallen more in line, creating a clearer policy path for the bank. With the Fed widely expected to press ahead with at least a further .5% worth of cuts this year, gold prices look set to continue higher as USD pulls back.
Technical Views
Gold
The rally in gold continues to push higher with price now trading above the 1.61% Fib level. With momentum studies bullish, focus is on a continuation higher with the 2% Fib level around 4,505 the next target for bulls. To the downside, the broken 1.27% Fib at 3,977.84 is the key support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.