Gold Records Strong Gains
MarketPulse | Aug 21, 2017 01:23PM ET
Gold has started the week with considerable gains. In the Monday’s North American session, spot gold is trading at $1291.75, up 57% on the day. There are no US events on the schedule, so we’re unlikely to see any significant movement for the remainder of the day.
It was a busy week for gold, as the metal responded to geopolitical events. Early in the week, gold prices dropped, as tensions between the US and North Korea eased after the escalating war of words raised fears of military engagement between the two enemies. This revived risk appetite on the part of investors. However, gold was again in demand after the terror attack in Barcelona, which killed 13 and wounded over 100. This triggered a flight from risk, which saw gold hit the $1300 level, the first time that has happened since November 2016. Gold prices could rally higher if tensions in the Korean peninsula resume or if there is another terror attack in Western Europe.
The Federal Reserve all but promised three rate hikes in 2017, but those plans could be on hold. A rate hike is very unlikely before December, and even then the odds have been hovering below 50% for months (currently, the odds are pegged at 44%). With the markets unsure about the Fed’s rate policy, analysts will be carefully monitoring any comments from Fed policymakers. They won’t have to wait long, as central bankers gather in Jackson Hole, Wyoming on Wednesday. A possible rate hike is not the only issue the Fed has to deal with in the near future. The markets will be looking for guidance with regard to the Fed’s balance sheet of $4.2 trillion. Policymakers have said they plan to start reducing the balance sheet this year, and the trimming could begin as early as next month. A reduction in the balance sheet should benefit the dollar, as a trim of $60 billion is equivalent to a rate increase of 25 basis points. No less important is the psychological aspect of a reduction, which would represent a vote of confidence by the Federal Reserve in the strength of the US economy.
XAU/USD Fundamentals
Monday (August 21)
- There are no US events
XAU/USD for Monday, August 21, 2017
XAU/USD August 21 at 13:00 EST
Open: 1284.52 High: 1294.08 Low: 1280.61 Close: 1291.98
XAU/USD Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1232 | 1260 | 1285 | 1307 | 1337 | 1367 |
- XAU/USD showed little movement in the Asian session. The pair posted gains in the European session and is steady in North American trade
- 1285 is a weak support level
- 1307 is the next resistance line
- Current range: 1285 to 1307
Get The News You Want
Further levels in both directions:
- Below: 1285, 1260, 1232, 1199 and 1170
- Above: 1307, 1337 and 1367
OANDA’s Open Positions Ratio
In the Friday session, XAU/USD ratio is showing long positions with a slight majority (51%), indicative of a lack of bias as to what direction XAU/USD will take next.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.