Gold reaching for new yearly highs – NFPs as a short-term brake pad?
Source: Economic Events 7, 2019 - Admiral Markets' Forex Calendar
In our technical piece for Gold last Monday, we pointed out that, by "[…] reconquering 1,310 USD into the start of the week, further gains up to 1,325 USD are to be expected. Still, we only see this level as a potential stop-over up to the current yearly highs of around 1,347 USD.[…]"
And in fact, the precious metal went to 1,325 USD on Monday, with further gains up to 1,337 USD and trading in striking distance of the current yearly highs around 1,347 USD.
Those, who didn't trade the direct break above 1,310 are currently waiting for a pullback to happen where today's NFPs are a potential trigger event.
After the latest economic releases with the ISM Manufacturing and ADP data sets coming in below expectations, and FED chairman Powell opening the door for a potential rate cut on Tuesday, any positive NFP reading today (NFPs > 200k and Average Hourly Earnings (MoM) ≥ 0.3%) leaves Gold vulnerable to a short-term correction.
Even though we do not necessarily see Gold dropping over 1% on a solid NFP reading, a re-test of 1,325 USD or a little lower around 1,310 USD can be seriously considered a potential long-trigger targeting to anticipate a break to new yearly highs and an attack at the strong resistance zone around 1,360/370 USD.
In general, the bullish picture in Gold on a daily time-frame stays active as long as we trade above 1,266 USD:
Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between March 7, 2018, to June 6, 2019). Accessed: June 6, 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%.
Are you ready to start trading Gold with Admiral Markets? Find out how you can get started by clicking the banner below!
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.
