Gold held above $1,400 an ounce amid some string of better than expected U.S economic data during the week before rallying to its first intraday climb above $1,450 an ounce in six years. The sudden gold rally during the week was fueled by some consolidation above the $1,400 an ounce support handle, but mainly from comments from New York President John Williams, suggesting an aggressive interest rate cut at the Federal Reserve’s policy meeting at the end of this month. Such comments also drove bond yields and the dollar lower.
Gold lost momentum on Friday, pulling back towards $1,420.04 level from the day high of $1,444 levels before closing at $1,426.10 for the session as the dollar strengthened and from profit taking prior to the weekend start. Despite gold giving back some of its gains for the day, it still ended up roughly 1% from last week.
Market focus this week would be focused on a string of key U.S economic indicators that would provide further direction for the U.S central bank’s decision to cut interest rates by 50 or 25 basis points. With the current annual inflation at 1.6% in June, 2019 from 1.8% in the previous month, it may not be wise for the central bank to be too aggressive on a 50 basis point cut. Should a 25 basis point cut happen, we could see gold prices retest $1,400 an ounce in the near-term, but supported at this level should the U.S central bank keep its doors open to further rate cuts throughout the rest of 2019.
4 HRS TECHNICAL PIVOT LEVELS
S1 – 1419.50 R1 – 1432.50
S2 – 1407.50 R2 – 1440.00
S3 – 1400.00 R3 – 1450.00
S4 – 1390.00 R4 – 1467.00
Today’s Trading Range: $1,407.00 - $1,428.50
Could consider selling the gold below $1,418.50 should $1,419.50 support be taken out, eyeing $1,413 to profit and stop above $1,423.
Opportunities to buy on the dips below $1,410, eyeing $1,414 to profit and stop below $1,407
By Mr. Hawk Cheng
Chief Advisor of Golden FX Link Capital
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