Another Hold?
The week has been volatile but no huge trend of either bear or bull seems to have been witnessed, but negative talk by the BOE created uncertainty. Making it seem as though Gold may actually continue back up to $1350.
Monday's open and close ended being only four dollars apart, however we did witness some quite strong movement throughout the day. The two main influences were the: ECB President Mr Draghi speaking and the release of the US New Home Sales. Gold rose almost $10 from open before bouncing around and falling as a result of gains in the Dollar, what is interesting is that New Home Sales even with a very negative result didn't cause much movement for Monday's market. By close the precious metal was sitting at $1333 per troy ounce.
Tuesday's focus was on three events taking place in the US. We had the release of their Core Durable Goods m/m, which was negative and -0.7% below previous, but because of comments made during the same time by the Fed Chair Mr Powell the negative consequences on the Dollar were basically removed, and the US Dollar continued to rally further up which pushed down Gold further. Then finally we had the US CB Consumer Confidence release, this was heavily above forecast by over 4 index points. These important events during Tuesday had damning effects on the value of Gold, strong drop off was witnessed during and after Mr Powells speech and also further dipped after the Consumer Confidence result. This meant the precious metal fell around $15 dollars throughout the day and was sitting at $1317 by close.
Wednesday saw the US Dollar hit a 5 week high due to the continuing trend of Tuesday carrying on, but Golds movement on Wednesday was very limited. US Prelim GDP q/q was bang on target which did little as it just confirmed the confidence we had already been seeing in the USD/JPY market. But Wednesday was the peak of the week for the US Dollar, such negative results from Pending Home Sales m/m being strongly negative caused a retrace for the power currency, yet little gain was seen for Gold which is surprising.
Thursday was a busy day for releases, we had the UK's Manufacturing PMI, which was worth watching just in-case we witnessed any strong digression from the forecast yet we didn't so the consequences on the cable were minimal. Later we focused on the US releases, Mr Powell spoke as did Mr Trump later in the evening. But before these two spoke we had the US Unemployment Claims results, which were down 16k, positive for the US economy. Then Mr Powell spoke and his hawkish tone created a positive knock-on effect on the US dollar, this put with the ISM Manufacturing PMI enabled the Dollar to continue to climb. This produced some insane volatility in the Gold Market, making it fall over $10. But as a result of Trump's comments in his speech later in the day around the 'metal tariff' implemented, it led to big dip in the US Dollar and allowed Gold to regain basically all the value from earlier in the day.
Friday as been a pretty quiet day actually, with the release of only a few events. We had the UK's Construction PMI, which came in above forecast but there was little consequence on Gold, as this only effects the cable market in forex when released. Later we had Mr Carney speaking, which of course creates volatility within the market but it didn't produce any powerful directional change. Later on, and we just had the British Prime Minister May speaking about the 'hard facts' of Brexit(BBC, 2017). This is more interesting to watch as the actual current implications on markets aren't huge but it can explain what the UK government will be the best way to positively deal with the shit situation. Yet Fridays biggest worry has been the 'trade tariff rumble'(Investing.com, 2018) This has produced quite some negative movement for the US/JPY throughout today's trading period, falling fairly steadily. This has meant that we have seen an opposite movement for Gold during afternoon training, up almost $10 since open.
The Naive Trader
Forex Factory, 2018
IG.com, 2018
Investing.com, 2018
Monday's open and close ended being only four dollars apart, however we did witness some quite strong movement throughout the day. The two main influences were the: ECB President Mr Draghi speaking and the release of the US New Home Sales. Gold rose almost $10 from open before bouncing around and falling as a result of gains in the Dollar, what is interesting is that New Home Sales even with a very negative result didn't cause much movement for Monday's market. By close the precious metal was sitting at $1333 per troy ounce.
Tuesday's focus was on three events taking place in the US. We had the release of their Core Durable Goods m/m, which was negative and -0.7% below previous, but because of comments made during the same time by the Fed Chair Mr Powell the negative consequences on the Dollar were basically removed, and the US Dollar continued to rally further up which pushed down Gold further. Then finally we had the US CB Consumer Confidence release, this was heavily above forecast by over 4 index points. These important events during Tuesday had damning effects on the value of Gold, strong drop off was witnessed during and after Mr Powells speech and also further dipped after the Consumer Confidence result. This meant the precious metal fell around $15 dollars throughout the day and was sitting at $1317 by close.
Wednesday saw the US Dollar hit a 5 week high due to the continuing trend of Tuesday carrying on, but Golds movement on Wednesday was very limited. US Prelim GDP q/q was bang on target which did little as it just confirmed the confidence we had already been seeing in the USD/JPY market. But Wednesday was the peak of the week for the US Dollar, such negative results from Pending Home Sales m/m being strongly negative caused a retrace for the power currency, yet little gain was seen for Gold which is surprising.
Thursday was a busy day for releases, we had the UK's Manufacturing PMI, which was worth watching just in-case we witnessed any strong digression from the forecast yet we didn't so the consequences on the cable were minimal. Later we focused on the US releases, Mr Powell spoke as did Mr Trump later in the evening. But before these two spoke we had the US Unemployment Claims results, which were down 16k, positive for the US economy. Then Mr Powell spoke and his hawkish tone created a positive knock-on effect on the US dollar, this put with the ISM Manufacturing PMI enabled the Dollar to continue to climb. This produced some insane volatility in the Gold Market, making it fall over $10. But as a result of Trump's comments in his speech later in the day around the 'metal tariff' implemented, it led to big dip in the US Dollar and allowed Gold to regain basically all the value from earlier in the day.
Friday as been a pretty quiet day actually, with the release of only a few events. We had the UK's Construction PMI, which came in above forecast but there was little consequence on Gold, as this only effects the cable market in forex when released. Later we had Mr Carney speaking, which of course creates volatility within the market but it didn't produce any powerful directional change. Later on, and we just had the British Prime Minister May speaking about the 'hard facts' of Brexit(BBC, 2017). This is more interesting to watch as the actual current implications on markets aren't huge but it can explain what the UK government will be the best way to positively deal with the shit situation. Yet Fridays biggest worry has been the 'trade tariff rumble'(Investing.com, 2018) This has produced quite some negative movement for the US/JPY throughout today's trading period, falling fairly steadily. This has meant that we have seen an opposite movement for Gold during afternoon training, up almost $10 since open.
The Naive Trader
Forex Factory, 2018
IG.com, 2018
Investing.com, 2018
Hello, I have been reading your blog for a while and one thing that has caused confusion for personally is why the dollar and gold work so much in relation to the other? Is it just the dollar or do all currencies factor in?
ReplyDeleteBasically I trade just the USD/XAU market, and this means that Gold is traded against the US and therefore the Dollar has the most influence on this market. However if I were to be trading against a different currency, you are right, other currencies come into play and become more influential.
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