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22 Apr 2015
Gold likely to remain trapped in the $1190-$1212.50 range – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Dhwani Mehta, uses macro and technicals to explain that Gold might remain trapped in the $1190-$1212.50 range in this week, awaiting a clarity in direction from the 29th April Fed meeting.
Key Quotes
“..onoging talks surrounding Greece is likely to buoy the gold as geopolitical tensions boost the safe-haven appeal in gold.”
“Recently, Russia, the fifth-biggest holder of the metal, returned to buying gold in March after taking a break in January and February. The nation increased foreign reserves of bullion to 39.8 million ounces, or about 1,238 metric tons, as of April 1, compared with 38.8 million ounces a month earlier, the central bank reproted on Monday. The 30-ton purchase was the most since September.”
“Though the US dollar has eased in the last couple of session on a corrective slide, the underlying bullish momentum is expected to continue on the back of upbeat US fundamentals”
“Investors remain cautious and refrain from creating fresh positions in gold ahead of the Federal Reserve’s (Fed) April 29 meeting , with the Fed expected to keep a slightly hawkish tone, favouring the USD bulls.”
“Moreover, with recent slightly better than estimates key US CPI print, Fed rate hike talks this June may be back on the table, pushing treasury yields across the curve higher. This may dampen gold’s appeal as an alternate higher yielding asset.”
“Technically, on the daily chart, gold prices are stuck in a pennant formation with upside capped by 200-DMA located at 1212.50 levels. The 50-DMA located at 1190 acts as a critical support. More so, the daily RSI wavers around the mid lines indicating indecisiveness between the bulls and the bears.”
“Hence, in the week ahead gold prices may continue to trade in a narrow range between USD 1212-1190 levels correlating with the above mentioned fundamentals.”
Key Quotes
“..onoging talks surrounding Greece is likely to buoy the gold as geopolitical tensions boost the safe-haven appeal in gold.”
“Recently, Russia, the fifth-biggest holder of the metal, returned to buying gold in March after taking a break in January and February. The nation increased foreign reserves of bullion to 39.8 million ounces, or about 1,238 metric tons, as of April 1, compared with 38.8 million ounces a month earlier, the central bank reproted on Monday. The 30-ton purchase was the most since September.”
“Though the US dollar has eased in the last couple of session on a corrective slide, the underlying bullish momentum is expected to continue on the back of upbeat US fundamentals”
“Investors remain cautious and refrain from creating fresh positions in gold ahead of the Federal Reserve’s (Fed) April 29 meeting , with the Fed expected to keep a slightly hawkish tone, favouring the USD bulls.”
“Moreover, with recent slightly better than estimates key US CPI print, Fed rate hike talks this June may be back on the table, pushing treasury yields across the curve higher. This may dampen gold’s appeal as an alternate higher yielding asset.”
“Technically, on the daily chart, gold prices are stuck in a pennant formation with upside capped by 200-DMA located at 1212.50 levels. The 50-DMA located at 1190 acts as a critical support. More so, the daily RSI wavers around the mid lines indicating indecisiveness between the bulls and the bears.”
“Hence, in the week ahead gold prices may continue to trade in a narrow range between USD 1212-1190 levels correlating with the above mentioned fundamentals.”