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Will the NFPs disappoint, and Gold start another push at 1,440 USD?

July 05, 2019 10:30

Source: Economic Events July 5, 2019 - Admiral Markets' Forex Calendar


Into the weekly close, we want to look at Gold again. With the Non-Farm Payrolls being published, we face a potential market mover - even though Gold presented itself already and once again quite volatile over the last days.

The reason can most likely be found in a Tweet from US president Trump: in this tweet, he talks about his intention to nominate Judy Shelton to be on the board of the Federal Reserve. What's interesting about Shelton is, that beside her ongoing criticism of the Fed, in 2019, she said that she hoped for a new Bretton Woods-style conference where countries would agree to return to the Gold standard.

As a result of Trump's tweet, and 10-year USTs dropping below 2% again, Gold again attacked its current yearly highs around 1,440 USD.

If today's NFPs disappoint, new yearly highs are likely in the precious metal, and could potentially level the path up to 1,480/490 USD in the days to come.

In fact, chances are good that NFPs will see at least a mixed number, probably worse than that. The reason can be found in the 'not so good' ADP reading on last Wednesday: here, numbers printed the biggest miss since February 2010, with the second significant plunge in small businesses and here between 1- 19 employees which is noteworthy due to their leading tendency for the economic cycle.

With that in mind, another stint towards and below 1,400 USD seems unlikely. And even if we, by surprise, get to see such a development, the next potential target can be found around 1,360/365 USD, the multi-year breakout region June 20, and potential midterm Long trigger:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between April 4, 2018, to July 4, 2019). Accessed: July 4, 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%.


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