Gold Jumps To March’s Highs After Fed and BoE; Good US Data

Gold and silver are trading positive on Thursday as the Federal Reserve paused in its interest rate hike path as it says the FOMC doesn’t expect any other hike in 2019. Also, a surprising US growth forecast added to worries about a possible global economic slowdown.

Gold is trading at highs since February 28, while Silver broke the 50-day moving average and it is now testing march highs too. Palladium remains trading its own story, and it reached fresh all-time highs.

The Federal Reserve says enough and stops hiking cycle

The Federal Reserve was more dovish than expected on Wednesday’s meeting as it paused its 3-year tightening cycle. Also reduced its growth expectations for the United States economy.

In doing so, the fed fueled concern about global economy and joined other central banks in dovish positioning ahead of global economic slowdown.

According to FX Empire Analyst James Hyerczyk, “the dovish Fed triggered a steep plunge in U.S. Treasury yields, helping to make the U.S. Dollar a less-attractive investment while increasing demand for dollar-denominated gold.”

Later on the day, the Bank of England decided unanimously to leave its interest rate unchanged at 0.75% and the asset purchase facility at 435€ billion.

According to the Bank, Brexit uncertainty paralyzes decisions, but the BoE is ready to act. Inflation and employment numbers are okay, and the BoE said that the next move could be on interest rates.

The GBP/USD reacted to the downside, pushing the dollar positive on the day. However, commodities are holding gains.

Another relief for the United States was the US economic data released today. Jobless claims came better than expected, and the Philadelphia Fed manufacturing survey crushed all estimates as it jumped to 13.7.

Long story short, as Hyerczyk said in his article, “the dovish Fed triggered a steep plunge in U.S. Treasury yields, helping to make the U.S. Dollar a less-attractive investment while increasing demand for dollar-denominated gold.”

Gold trades at march highs after logging five positive days

The Yellow metal is trading positive for the fifth consecutive day on Thursday amid a weak dollar and as investors are looking for a safer asset to invest.

Gold is trading 0.40% positive on the day at 1,317 following the critical break of the 1,310 level performed on Wednesday.

Gold is now testing the 1,320 area, the highest level since February 28. Next resistance is at 1,330, and above it, 1,350.

To the downside, XAU/USD needs to reject the 1,320 and gets back below the 1,305 area, where the 20 and 50 days moving averages are now.

Silver tests March highs

Silver is trading positive for the fifth day in a row amid a weak dollar and a positive correlation with Gold. Against the dollar, silver is trading at highs since March 1, which are the highest level traded in the month.

Now, XAG/USD is trading 0.42% positive in the day at 15.55. The pair is consolidating gains above the 15.50 area, and it is now heading to 15.70.