Source: Economic Events September 20, 2019 - Admiral Markets' Forex Calendar
While Gold didn't take on further bullish momentum after the Fed rate decision on Wednesday, instead stabilised below 1,500 USD, our middle-term bullish outlook stays intact.
With a thin economic calendar into the weekly close, we want to look at the Fed and its decision, and how that could affect the price action in Gold in the days to come.
So, after the Fed cut rates as expected by 25 basis points to 1.75 – 2%, the deeper cut of overnight reverse repos by 0.3% to 1.7% to alleviate funding pressures in short-term lending markets at the beginning of this week, potentially pointing to first signs of a credit crunch, financial stress and a favourable environment for Gold in general. Comments from Fed chairman Powell, stating during his press conference on Wednesday that the Fed may resume organic balance sheet growth earlier than expected (to put it differently: bringing a relaunch of QE on the table, at least between the lines) will rather sooner than later result in attention among Gold bulls.
While Gold didn't take the bait immediately, we still see the overall advantage in Gold on the upside, technically as long as we trade above 1,380 USD.
In fact, we consider the drop below 1,500 USD not at big deal at all, instead see a potential mid-term long trigger around 1,440/450 USD with an overall potential target around 1,650/700 USD in the weeks to come staying active:
Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between June 21, 2018, to September 19, 2019). Accessed: September 19, 2019, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2014, the value of Gold fell by 1.7%, in 2015, it fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, meaning that after five years, it was up by 6.4%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.