Source: Economic Events September 09, 2020 - Admiral Markets' Forex Calendar
While the reaction in Gold after FED Chairman Powell's expected speech in Jackson Hole, where he brought up "average inflation targeting", meaning that the FED will allow inflation to run above the FED target rate of 2% for a period of time, could be considered fairly strong, the yellow metal failed to recapture the 2,000 USD mark.
While we still consider the technical picture to be neutral between 1,865 and 2,075 USD, with the failed push above 2,000 USD, the risk of a break to below 1,900 USD and a push down to 1,800 USD remains an option.
A potential trigger for a sharper drop in Gold could be delivered from the bond market. While the precious metal has withstood selling pressure resulting from rising US yields, this could change. Here are some key points to consider:
- Powell's Jackson Hole rhetoric foreshadowed that such a change was in store
- US economic projections continue to improve
- 10-year US yields are making their way back to 100 basis points and may move even higher.
Still, this all wouldn't necessarily result in a clearer downtrend in Gold since we would expect the FED to sooner than later step into such developments in US yields, cap rates and finally start to actively communicate a yield curve control policy, which would be very bullish for Gold and level the path for a deep run above 2,000 USD and significantly higher.
Short-term and purely technically, Gold remains positive above 1,900 USD and is capable of another attempt at recapturing the 2,000 USD mark any time.
On the other hand, a break below 1,865 USD would level the path down to 1,800/810 USD as a first target:
Source: Admiral Markets MT5 with MT5SE Add-on Gold Daily chart (between April 29, 2019, to September 08, 2020). Accessed: September 08, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold fell by 10.4%. In 2016, it increased by 8.1%. In 2017, it increased by 13.1%. In 2018, it fell by 1.6% and in 2019, it increased by 18.9%, meaning that in five years, it was up by 28%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.