Fundamental Forecast for Gold: Bullish
For usually a second time in 10 weeks, bullion prices finished a week lower. The biggest growth of a past week pushing bullion reduce was a Fed’s seductiveness rate expectations. On Monday, Fed Fund futures were presaging a 50% possibility of a rate travel during a Fed’s assembly on Mar 15. As a speeches from Trump and Fed officials rolled in, traders began to trust a rate travel was occurring earlier than later.
As a result, we saw rate travel expectations bloat to 98% on Friday Mar 3 and bullion prices sole off briefly.
Logic would foreordain that a rate travel from a Fed would expostulate a dollar aloft and gold, that yields nothing, lower. That settlement has been seen in a cost movement of a past integrate days. However, if we vessel out we can viewpoint how a dual new Fed rate hikes were followed by rising bullion prices. It is transparent from a draft next that augmenting rates and even a new boost in rate travel expectations has driven bullion cost higher.
Perhaps bullion is signaling augmenting acceleration or that a rate tightening cycle is on hold. Fed Fund futures don’t agree. We will get another glance into a US economy this Friday as US Non-Farm Payrolls are released.
We continue to declare bullish technical signals. For example, bullion prices have remained inside a Elliott Wave channel (blue). Additionally, cost and a Ichimoku lagging line (purple line) sojourn above a Ichimoku cloud. We have confirmed a bullish disposition given Dec 29 when we argued that Gold prices could benefit in a face of lifting rates.
From a view perspective, Gold’s SSI reading has usually been dwindling given Jan 2017. A dwindling SSI advise bullish undertones for a yellow metal. Gold’s SSI reading sits during +1.58 and we can see live merchant positioning on a SSI page.
What is a quarterly opinion for Gold? Find out with a quarterly trade guide.
—Written by Jeremy Wagner
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