Gold - market update after two FED statements
Technical view:
-MACD on 4H near bearish crossing which brings sellers into the market in short term view
-RSI on 4H has still space for down side movement
Market broke above strong resistance this week and is searching now for support after falling back under last resistance line.
I expect bottom building at 1410 $ area which is next good support and first buy area after correction movement.
Fundamental view:
With increased speculation about falling interest rates, the price of gold has continued to soar and reached its highest level in six years.
On Friday the precious metal was temporarily traded on the London Stock Exchange for 1,453 US dollars per troy ounce. Gold was thus more valuable than it had been since the summer of 2013. Over the past few weeks new signals from leading central bankers in the USA and the Euro zone of interest rate cuts have triggered a rapid rally in the price of gold.
Since the beginning of June, the price of gold has risen by about twelve percent. The most recent price drivers were statements by leading representatives of the Fed. On Thursday evening the deputy chairman of the central bank Richard Clarida spoke out in favour of an early reduction worth acting quickly at the first sign of an economic emergency to lower interest rates, Clarida said in a television interview with Fox Business Network.
At about the same time the influential head of the New York central bank John Williams had spoken out. The Fed's representative also underscored the need for the Federal Reserve to react quickly to interest rates should the Guardians come to the conclusion that the U. S. economy is in trouble.
However the Williams statements caused confusion in the financial markets. On the night of Friday a spokeswoman for the New York regional central bank put Williams statements into perspective. They therefore fell within the framework of an academic speech and should not be understood in the context of current monetary policy. According to the latest statements by the Fed the market had priced in a rate cut of 0. 5 percentage points more strongly at the next interest rate meeting at the end of July.
-MACD on 4H near bearish crossing which brings sellers into the market in short term view
-RSI on 4H has still space for down side movement
Market broke above strong resistance this week and is searching now for support after falling back under last resistance line.
I expect bottom building at 1410 $ area which is next good support and first buy area after correction movement.
Fundamental view:
With increased speculation about falling interest rates, the price of gold has continued to soar and reached its highest level in six years.
On Friday the precious metal was temporarily traded on the London Stock Exchange for 1,453 US dollars per troy ounce. Gold was thus more valuable than it had been since the summer of 2013. Over the past few weeks new signals from leading central bankers in the USA and the Euro zone of interest rate cuts have triggered a rapid rally in the price of gold.
Since the beginning of June, the price of gold has risen by about twelve percent. The most recent price drivers were statements by leading representatives of the Fed. On Thursday evening the deputy chairman of the central bank Richard Clarida spoke out in favour of an early reduction worth acting quickly at the first sign of an economic emergency to lower interest rates, Clarida said in a television interview with Fox Business Network.
At about the same time the influential head of the New York central bank John Williams had spoken out. The Fed's representative also underscored the need for the Federal Reserve to react quickly to interest rates should the Guardians come to the conclusion that the U. S. economy is in trouble.
However the Williams statements caused confusion in the financial markets. On the night of Friday a spokeswoman for the New York regional central bank put Williams statements into perspective. They therefore fell within the framework of an academic speech and should not be understood in the context of current monetary policy. According to the latest statements by the Fed the market had priced in a rate cut of 0. 5 percentage points more strongly at the next interest rate meeting at the end of July.
Trade closed: target reached:
market reached buy area
The analyses provided are for informational purposes only and do not constitute financial advice or recommendations to buy or sell anything. The information presented is based on personal research and interpretation.
