Our technical intraday play in EURAUD turned out to be yet another success as the pair hit our target zone. This provided our traders with an opportunity to bank approx. 40 to 60 pips. Recently our analysis has produced successful trading opportunities in gold, S&P 500, EURUSD and USDJPY. Today we are focusing on gold, a market that is oversold and has attracted bullish comments from Credit Suisse. US GDP release yesterday was uneventful as there was no change to the previous number and it was in line with the analyst consensus expectation. Unemployment claims were a disappointment at 778K, (732K expected) while the University of Michigan consumer sentiment survey was confirmed at 76.9 (76.9 expected). The FOMC minutes revealed nothing that would have moved the markets. Today’s calendar is light. The only risk events that might move the prices are the Gfk consumer confidence release from Germany and the speech by Philip Richard Lane, an Executive Board member of the ECB. See our economic calendar for times and details. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

The price of gold has retraced to levels that used to act as resistance in 2011 and 2012 before the market started a long-term decline. This technical factor might be the reason for Credit Suisse’s timing on their fundamentally-oriented research note and a suggestion that the price of gold should still have more upside ahead as fundamentals are supportive. They point out that there should be more stimulus ahead and that there is no competition from the US real rates as they remain low (gold being an asset that doesn’t have yield is sensitive to interest rates). These elements are likely to cause the USD to remain weak which should support the dollar-priced gold.

The price of gold stopped sliding yesterday and the futures market gapped higher at the start of the Globex session. This suggests that after the sizeable decline the line of least resistance is to the upside and we might see a bounce higher in the price of gold. We are looking for buy signals above yesterday’s low at 1800.20 with the first target zone at 1823.40 – 1832.60 and the second target zone at 1844.70 – 1853.90. The key support and resistance levels for gold are 1800.20, 1817.60, 1832.90 and 1850.40.

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Recent macroeconomic data releases

  • French Flash Services PMI, 38, 39.2 expected
  • French Flash Manufacturing PMI 49.1, 50.2 expected
  • German Flash Manufacturing PMI 57.9, 56.0 expected
  • German Flash Services PMI 46.2, 46.1 expected
  • UK Flash Manufacturing PMI 55.2, 50.5 expected
  • UK Flash Services PMI 45.8, 43.2 expected
  • US Flash Manufacturing PMI 56.7, 52.5 expected
  • US CB Consumer Confidence 97.7 expected
  • US Prelim GDP 33.1%, 33.1% expected
  • US Unemployment Claims 778K, 732K expected
  • US Revised UoM Consumer Sentiment 76.9K, 76.9 expected
  • FOMC Meeting Minutes

Macroeconomic data releases today

  • Australian Private Capital Expenditure -3.0%, -1.5% expected
  • Gfk Consumer Confidence Survey -5 expected
  • ECB Lane Speaking

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

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