US yields about to collapse – Gold breaking 1,700 USD only a question of time
Source: Economic Events March 11, 2020 - Admiral Markets' Forex Calendar
Global financial markets were hit by another risk-off wave at the start of the week, after oil prices collapsed in response to Russia resisting Saudi Arabia's push for deeper production cuts at the OPEC meeting last week.
While Equity markets dropped massively, and market participants talked of a "Black Monday", Gold failed to significantly break above 1,700 USD.
This seemed to be because traders sold profitable Gold positions to meet margin calls resulting out of dropping Equity prices.
But even if Gold lost some of its bullish momentum, the outlook stays very favourable for the precious metal: after the Fed announced its "emergency rate cut" last Tuesday, the first time since October 2008, and market participants expect further cuts by the Fed.
In fact, the Fed Watch Tool currently sees the Fed cutting another 75 basis points at the meeting on March 18, with volatility staying elevated and a clear risk-off bias among market participants, which should keep the pressure on US yields high. Thus, the outlook for Gold stays very positive and a sustainable break above 1,700 USD seems only to be a question of time.
Technically, the mode stays bullish as long as we trade above the daily trend support which can still be found around 1,535/545 USD:
Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between December 7, 2018, to March 10, 2020). Accessed: March 10, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold 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%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.
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.