After the comments from FED member Raphael Bostic on Wednesday where he stated that "he sees no "urgency" for the FED to move, or to raise rates high enough to actually restrict economic growth", the US-Dollar not only took a hit, but Gold made another attempt to break above 1,300 USD/ounce. As one can see in the FED Watch Tool, market participants now see only a nearly 18% chance for one rate hike of the FED till December 2019.
With this bias in mind, all incoming data sets from the US, especially in terms of employment and inflation (as of today, 2:30pm CET), can be most likely interpreted in the following way: if data comes in below expectation, further losses in the USD seem likely, while Gold will most likely attack the region around 1,300 USD/ounce again.
Source: Economic Events 11 January 2019 - Admiral Markets' Forex Calendar
But even if we currently find ourselves in a favourable seasonal environment for Gold (in fact, from Monday, 14 January till 5 February, Gold saw over the last 20 years, in 75% of the cases, an average gain of 30.61 USD/ounce, while in 5 years it lost on average 12.86 USD/ounce), lots of bad and dovish news has already been priced into the US-Dollar. That means that on the other hand, any dataset coming in as expected or above expectation could trigger a sharper decline in Gold. But from a technical side, Gold can be considered bullish, as long as we trade above 1,275/277 USD/ounce with a target of at least 1,308/310 USD/ounce on the upside:
Source: Admiral Markets MT5 with MT5SE Add-on Gold 4-Hour chart (between 04 November 2018 to 10 January 2019). Accessed: 10 January 2019 at 10:00 PM 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%.
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.