Gold (XAUUSD) Forecast, Page 1

It’s funny. The news tends to lead investors to believe that gold is a buy when there is uncertainty and fear in the markets, but this type of thinking doesn’t seem to be working at this time. 

Momentum has turned neutral

Gold markets continue to go back and forth in general, as the market finds the $1550 level is an area of stability. This leads me to believe that we are probably going higher over the longer term, but things are awfully quiet right now.

Precious metals and miners are consolidating before their next advance. Gold could reach $1700+ by March, and we see explosive potential in silver. 

Even though the beginning of yesterday’s session was rather uneventful, its remaining hours proved much more informative and meaningful. In fact, based on how the developments unfolded, we decided to go long silver.

The price of gold lost 0.15% on Tuesday, as it extended its short-term consolidation following the previous week’s Wednesday’s record-breaking advance above $1,600 mark that ended with a sharp intraday downturn.

Asian stocks and currencies are mixed as investors grapple with the extent of the coronavirus outbreak and its potential implications on the global economy.

In the middle of the week, I think we can already state that the main topic on the Forex market is the reversal on the American Dollar. Dollar bears tried their chances yesterday but the USD weakness was contained very efficiently. In few cases, that allowed to create sweet reversal

Our recent research suggests the US stock market may be entering a period of volatility that may include a broad market rotation/reversion event.  We believe this volatility event could begin to happen anytime over the next 10 to 30+ days. 

S&P 500 & Bonds – The Teflon ES (S&P 500 futures) touched 3338 a new all-time high, and USDJPY is back above the 110 handles as investors continued to rotate into US stocks, which offer the less risky and safest equity market harbor amid the China flu scare.

The CDC has reported it’s first US confirmed case of Coronavirus and has adjusted their traveler alert watch to Level 2, which advises travelers to “practice enhanced precautions.” The travel alert effectively capped the US market recovery from overnight lows and turned stocks moderately south again into the close.

Gold rallied 27% over 12-months during the SARS virus epidemic

Gold markets were very choppy during the day on Tuesday as volume came back into the picture. The $1550 level continues to be crucial, and we are still in the midst of building a potential bullish flag.

In times of political and economic uncertainties, analysts recommend investing in safe-haven assets. The US dollar, Japanese yen, and gold were always considered as the main refuges.

Asian shares flashed red on Tuesday as concerns about the economic impact of a coronavirus outbreak in China drained risk appetite

The “sluggish” forecast from the IMF likely means that central banks will keep interest rates at or near historically low levels. Furthermore, it opens the door to more creative central bank stimulus like Quantitative Easing (QE) and fresh fiscal stimulus. This could provide support for gold throughout the year.

Equity markets moved into risk-off mode overnight with E-mini S&P futures down 40bp, and Europe is expected to open the same. Asian weakness was led primarily by the spread of the coronavirus in China, which comes on top of a downgrade of global growth forecasts from the International Monetary Fund,

I don’t want to sound like the boy who cried wolf, but the latest developments in the Chinese coronavirus crisis occurring in the central Chinese city of Wuhan is a building concern.

Prices are forming a cup and saucer continuation pattern

Gold markets did very little during the trading session on Monday, as the Americans were celebrating Martin Luther King Jr. Day. That being said, we are at extreme highs and it looks like we are ready to “kill time” in order to build up pressure again.