Gold Breakout Pushing Higher
Gold prices continue to push higher today with the market now fast approaching a test of the 2% Fib extension. The breakout in gold is being further supported this week by fresh US data weakness after softer-than-forecast retail sales figures yesterday. The headline reading came in at 0.2%, well below the 0.6% the market was looking for. On the back of recent data undershoots in key readings such as CPI, PPI, the NFP, fears over a US downturn are growing. Against this backdrop, near-term Fed easing expectations are rising, with USD coming under heavy selling pressure as a result, helping lift demand for gold.
FOMC Up Next
Looking ahead this week, traders will be waiting for the Fed’s latest outlook and assessment at the March FOMC tomorrow. While the Fed is expected to keep rates on hold, traders will be looking for signs that a rate cut is imminent. Market pricing has recently softened a little for May with June now seen as the prime candidate for the next cut. However, if we get a more dovish-than-expected message from the bank tomorrow, May rate-cut pricing could jump higher. In this scenario, USD would be heavily sold with gold prices accelerating sharply higher.
Technical Views
XAUUSD
The breakout above the 2,949.15 level and the bull channel highs is gathering pace with price now fast approaching a test of the 2% Fib level at 3,039.97. Momentum studies are showing some bearish divergence here. However, focus remains on a continuation higher while price holds above the 2,949.88 level.
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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.