GOLD: At Its Highest In Four Weeks Of $1235. Is This Set To Continue To $1243 Or Retest $1220?
Last week we saw Gold behave essentially as expected, we began the week with a sharp decline but quickly reversed as a result of Powell's speech. This week the rally has continued as Monday saw the commodity finally break free from the triangle range it had been stuck in for some time. Gold reached its highest price in four weeks of 1235.00 on Monday, this strength was a result of a healthy recovery in crude oil prices. Furthermore, a wide-spread selling pressure surrounding the greenback provided additional fuel to Golds fire. DXY is facing headwind at the moment with falling T-bond yields in the US and mixed manufacturing PMI data causing a lack of demand for the Dollar. These outside influences will all prove valuable this week for Gold.
With regards to Fundamentals this week that could be a catalyst for a further move for Gold, Federal Reserve chair Jerome Powell is due to give another speech on Thursday at the Housing Assistance Council's annual event in DC to discuss the economy and rural America. If last weeks tone is anything to go by it is unlikely his stance will be overly Hawkish. His speeches tend to provide healthy volatility for the market so this is definitely one to keep an eye on. Should his speech have a Dovish undertone we will likely see Gold finish the week on a high.
As always the technical perspective carries most significance, though we have broken above 1230.00 for now, I believe we may still have time to retest 1220.00 before rocketing to the 1243.00-1245.00 region. So, for now, its time to sit on your hands and wait for the entry!
Written by Sam Moore
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