Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
David Becker

Gold prices moved higher on Thursday following a dovish ECB meeting, where outgoing President Mario Draghi opened the door to an interest rate cut.  With countries around the globe poised to cut rates (Australia recent cut 25-basis points), the yellow metal is becoming one of the more attractive currencies. Gold prices rallied substantially between the beginning of the great recession until the Fed begain to unwind QE, moving up from approximate 1,050 to over 1,800. A breakout of the recent range could see gold prices surge higher.

Technical Analysis

Gold prices continued to rally, closing just below the February 2019 highs at 1,3446. Support on the yellow metal is seen near the 10-day moving average at 1,290. The 10-day moving average recently crossed above the 50-day moving average which means that a short term up trend is now in place. Momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal in overbought terriory. The current reading on the fast stochastic is 87, above the overbought trigger level of 80, which could foreshadow a correction.


The ECB is Dovish

European Central Bank President Mario Draghi made an inference that interest-rate cuts could be in the foreseeable future for the eurozone economy which is a significant policy shift that amplifies a global trend toward easier monetary policy. Draghi is scheduled to leave office in 5-months. His statement is similar to that of Federal Reserve Chair Jerome Powell this week that the Fed could cut short-term interest rates in response to any economic deterioration triggered by trade tensions.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.