The price of gold was on the brink of exceeding the basic psychological level of $ 1,800 per ONS once again on Monday. But can the right conditions eventually be aligned so that the yellow metal is out of the multi-month trading range?
Chris Weston: This week might be a problem for the price of gold! 1.797 dollars should be broken
According to Pepperstone research head Chris Weston, this week could be a problem for gold, especially if a certain level is not maintained. Chris Weston adds:
The weekly chart continues to show that the prices are running in the bearish channel, but there is no real momentum to push the price. Can it change this week?
Chris Weston stated that the precious metal will need to rise above the $ 1.797 / ONS level for it to fully bear an upward trend. At the time of writing, the price of gold is traded very close to that level and is located at $ 1,785. However, gold investors now know that they shouldn’t get excited too quickly after gold failed at $ 1,800 / ONS last month. Therefore, according to Chris Weston, May may not be any different.
Chris Weston: A much bigger sale for gold prices could be just around the corner!
One of the main risks to watch this week is US macro data better than expected and how markets will react to the news. Will stronger data help push the US dollar and stocks up while focusing on gold, or will better numbers boost inflation expectations and bring risk aversion into the market? Chris Weston warns that if the price of gold does not hold $ 1.756 per ONS this week, a much bigger sale could be around the corner. Chris Weston adds:
As always, watch the USD and US bond market, but if we see $ 1.756 collapse (possibly looking behind better U.S. data), $ 1. 720 kicks in before $ 1.677. The bulls will follow a breakout of $ 1.797.
Chris Weston: US payslips are the most important event risk of the week
The most important macrocre statement to watch closely is the April US employment report to be released on Friday. Market consensus sees that the US posted more than 900,000 new jobs after adding 916,000 new jobs in March. Chris Weston adds:
USA payrolls are the most important event risk of the week, with the market agreement set as 950 thousand jobs created and the unemployment rate is expected to decrease to 5.8%. The risk is for a higher number, but do good numbers lead to a broad atmosphere of risk aversion as the price rises and the USD higher investors expected higher rates? Or do good numbers lead to positivity based on a strong one? We suspect that we have reached a point where really good data could start to be bad for the markets.
Chris Weston: Gold price could benefit in response to new data
If this is the case, according to Chris Weston, gold prices could benefit and see higher prices in response to yellow new data. Chris Weston stated that a central market theme for May will be to find out how central banks around the world will start reducing their bond purchases. Chris Weston adds:
I argued that the combination of major central banks’ withdrawal of QE amid winds from restructuring in the US Treasury General Account would result in higher volatility in the markets. In the midst of this background, we continue to debate whether inflation is really as temporary as the FED and others believe. This is not a question we will learn soon, even if the markets think 18 months ahead.