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Gold Price Forecast: Stalling for Breath

Trader

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The gold price is quoted at $1813 in the midweek trading session as buyers continue to show interest and Richard Perry, analyst and technical forecaster at Hantec Markets, says targets at $1820 and $1858 are feasible over the coming weeks.

The consolidation that has set in on gold is into its fifth session now. The latest break to multi-year highs hit $1818 a week ago, but has since stalled.

We view this stalling as being a pause for breath rather than being any negative signal and still back moves for further multi-year highs above $1820 in due course.

The breakout from the April to June consolidation range derived an implied target area of between $1820 (a conservative target) and $1858 over the coming weeks.

Gold price chart

The extent of this target area has yet to be seen. Given the bullish configuration of technical, we continue to expect further gains will be seen. Momentum remains strong, with RSI in the high 60s and Stochastics holding well above 80.

There was a good reaction by the bulls yesterday, with weakness to the support of the five week uptrend (today at $1796) and the breakout support (of $1789) being bought into.

The hourly chart shows that perhaps the market is not quite ready (yet) for a breakout, as a mini range $1791/$1810 has formed, but we favour an upside break to continue the run of the trend higher.

Even if this trend is breached, we would still look to use any supported weakness into the support band $1764/$1789 as a chance to buy.

 

Markets: Risk Sentiment Boosted by Vaccine Trial Results

Once more the daily see-saw of risk appetite has taken affect as sentiment picks up again.

Could it be that this time drives a decisive move?

The swing back to positive risk has been driven by the results of a COVID-19 vaccine by US pharma company Moderna.

Results were “robust” with antibodies present in all 45 test subjects.

The development of a reliable vaccine is the key to opening the door to a serious recovery for markets and traders will need to assess the implications of these results.

Previous positive vaccine results have seen risk appetite peter out quickly in recent months. It is interesting to see that there was a decisive swing higher on Wall Street, that is continuing on futures today.

The US dollar is under pressure across the major currency pairs. Higher beta majors are performing well.

Is this move set to break markets out of their month long consolidations? There have been some early calendar events that could also forge moves today.

As expected, the Bank of Japan sat on its hands for its monetary policy decision, with no shift on rates or its yield curve control.

However, UK inflation has ticked higher than expected (on both core and headline) leading to an uptick on sterling today.

For later today, the survey data from the New York Fed could give an early insight into July and will be an interesting watch.