Gold bulls in a sweet spot for today’s Fed rate decision?
On Wednesday the main event and focus will be on the Fed Rate Decision.
Last week, after US president Trump announced a plan to restore tariffs on steel and aluminium shipped from Brazil and Argentina, in addition to proposed tariffs "up to 100%" on certain French goods (about $2.4 billion worth) in retaliation for France's digital services tax, risk-off in financial markets kicked in, initiating a drop in 10-year US-Treasuries yields.
As a result, Gold pushed higher, but gave back most of its gains by the weekly close, after Non-Farm Payrolls beat expectations with 266,000.
While we doubt the sustainability of the strong employment print, what will certainly be of high interest now is the Fed rate decision today.
If Trump's statements last week are to be believed, indicating no sign of urgency for a trade deal with China and the intention to wait until after the Presidential election in 2020, then they suggest that there is a very real possibility that the next set of US tariffs, due December 15,could go into effect.
Having that in mind, this seems especially true if the Fed doesn't deliver a dovish stance today, as Trump suggested in his tweets last Monday.
As a result, it could be in a very bullish spot with either a very dovish Fed or a risk-off mode from Trump escalating the trade war with China in the second half of the week.
In addition to that, we also want already to keep an eye on the seasonal bullish window in Gold between December 18 and January 10, where Gold saw an average gain of 47 USD for 12 of the past 15 years, while in the remaining three years, it dropped on average only 19.65 USD, while the maximum loss and the maximum drawdown of 31.03 USD.
With that in mind, technically our picture switches to Long again with Gold breaking back above 1,520 USD which would level the path up to the current yearly highs around 1,557 USD.
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money
Last week, after US president Trump announced a plan to restore tariffs on steel and aluminium shipped from Brazil and Argentina, in addition to proposed tariffs "up to 100%" on certain French goods (about $2.4 billion worth) in retaliation for France's digital services tax, risk-off in financial markets kicked in, initiating a drop in 10-year US-Treasuries yields.
As a result, Gold pushed higher, but gave back most of its gains by the weekly close, after Non-Farm Payrolls beat expectations with 266,000.
While we doubt the sustainability of the strong employment print, what will certainly be of high interest now is the Fed rate decision today.
If Trump's statements last week are to be believed, indicating no sign of urgency for a trade deal with China and the intention to wait until after the Presidential election in 2020, then they suggest that there is a very real possibility that the next set of US tariffs, due December 15,could go into effect.
Having that in mind, this seems especially true if the Fed doesn't deliver a dovish stance today, as Trump suggested in his tweets last Monday.
As a result, it could be in a very bullish spot with either a very dovish Fed or a risk-off mode from Trump escalating the trade war with China in the second half of the week.
In addition to that, we also want already to keep an eye on the seasonal bullish window in Gold between December 18 and January 10, where Gold saw an average gain of 47 USD for 12 of the past 15 years, while in the remaining three years, it dropped on average only 19.65 USD, while the maximum loss and the maximum drawdown of 31.03 USD.
With that in mind, technically our picture switches to Long again with Gold breaking back above 1,520 USD which would level the path up to the current yearly highs around 1,557 USD.
Ready to take your trading to the next level? Find out how in Admiral Markets’ new webinar series Trading Spotlight, where our trading experts will be discussing risk management, trading psychology, and their top strategies for trading the world’s most popular markets - admiralmarkets.com/e.../trading-spotlight-1
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money
