Fundamental Forecast for Gold: Neutral
- Gold Price Faces Range Highs and 200 Day Average after 6 day Run
- Looking longer-term? Review DailyFX’s 1Q Gold Projections
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Gold prices are rallied for a second uninterrupted week with a changed steel adult some-more than 1.56% to trade during 1248 forward of a New York tighten on Friday. The allege comes amid continued debility in a greenback with a DXY down 0.70% this week and leaves bullion probably unvaried for a month of March. The liberation closes a week only subsequent insurgency and nonetheless a broader design still targets a new high in gold, a evident allege is exposed into a tighten of a month while subsequent near-term technical resistance.
Looking forward to subsequent week, traders will be eyeing a third and final review on U.S. 4Q GDP with accord estimates job for an ceiling rider to 2% from 1.9%. Aside from a mercantile docket, demeanour for a uninformed collection of Fed tongue to expostulate USD / Gold cost movement with Chicago Fed President Charles Evans, Dallas Fed President Robert Kaplan, Chair Janet Yellen, Fed Governor Jerome Powell and Minneapolis Fed President Neel Kashkari slated for explanation subsequent week. Markets are labelled for 3 hikes in 2017 and for gold, a fuel for a postulated pull aloft could be sparked by possibly a change in a Fed’s tinge or a broader turnover in equity markets- (note a SPX posted a largest weekly detriment given Nov this week).
- A outline of a DailyFX Speculative Sentiment Index (SSI) shows traders are net prolonged Gold- a ratio stands during +2.0 (66.7% of traders are long)
- Long positions are 4.2% reduce than yesterday and 19.8% subsequent levels seen final week
- Short positions are also 0.4% aloft than yesterday and a towering 44.9% above levels seen final week
- Despite a fact that sell stays net-long, it’s critical to note that a new build in brief bearing leaves a risk weighted to a topside- demeanour for a continued diminution in long-positioning to offer serve justification of a broader change in sentiment.
Last week we remarkable that, “pullback’s should be noticed as opportunities for long-entries while above this week’s low with a crack aloft targeting initial insurgency objectives during a Mar open / 2017 high-day close, 1248/52 backed by a 200-day relocating normal (currently ~1260) a 1278 pivotal insurgency level.” This week’s high purebred during 1253 and streamer into subsequent week a game-plan stays unchanged.
I’ll be looking for some converging subsequent this connection insurgency section with a broader concentration aloft while above 1220– broader bullish cancellation rests with a monthly opening operation lows / pivotal support connection during 1193/99. Topside mangle targets sojourn unchanged.
—Written by Michael Boutros, Currency Strategist with DailyFX
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