Market Analysis: Gold bulls on fire, new yearly highs and a target placed at 1,360 USD
Source: Economic Events February 20, 2019 - Admiral Markets' Forex Calendar
As pointed out in our weekly market report on Monday, Gold remains bullish, and after the break to new yearly highs on Monday in a relatively thin market environment due to US bank holiday President's Day, last week's momentum was taken on by the bulls on Tuesday.
Even though the fundamental docket is quite thin this Wednesday, the Fed minutes in the evening could deliver another bullish push higher. This is particularly true if market participants find the Fed's stance to be more dovish than the already dovish Fed statement from January 30.
On January 30, the Fed delivered not only a 'wait-and-see' approach in regards to further rate hikes, but also declared that it would be prepared to adjust the balance sheet runoff 'in light economic and financial developments'.
Even though it seems difficult at first glance to expect increasingly dovish rhetoric, but any hint that could be interpreted as a "the next step in regards to rates is more likely to be a cut than a hike" has the potential to accelerate movement in Gold.
The target on the upside is around the 2017/2018 yearly highs of 1,360 USD/ounce, while the bulls have the advantage on their side on a daily time frame above 1,300 USD/ounce. Any pullback against 1,323/325 can be considered attractive for long-engagements from a risk-reward perspective.
Source: Admiral Markets MT5 with MT5-SE Add-on Gold daily chart (between November 17, 2017, to February 19, 2019). Accessed: February 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%.
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