Market News & Analysis


Top Story

What Does the Gold Market Know?

The FOMC left rates unchanged today, targeting the 1.5%-1.75% range, as expected.  The only small change the Fed made was to raise the IOER rate by 0.05% and announced that they would be extending repo operations until April.  Otherwise, the statement and the press conference were….boring (for lack of a better word).  However, as soon as the statement was released, gold began to go bid:

Source:  Tradingview, COMEX, City Index

Perhaps it was just back to business as usual.  Below is the base chart I’ve been using for Gold.  It’s the daily futures chart, which has broken out of a flag pattern and is currently on its way to target near 1723. Price had paused along the way and the RSI moved to extreme overbought territory (above 80).  They slight pullback gave the RSI room to unwind back into neutral territory. 

Source:  Tradingview, COMEX, City Index

Maybe someone knew early that Google was going to announce that they temporarily going to close all office in China due to the Coronavirus (source: Verge). 

Or perhaps someone was just trying to push price higher through horizontal resistance, as seen on a 60-minute chart:

Source:  Tradingview, COMEX, City Index

On a 240-minute chart, price is trying to break higher out of a symmetrical triangle.  Perhaps someone was trying to push it through the upper trendline.

Source:  Tradingview, COMEX, City Index

Does the Gold market know something other markets don’t?  Whatever the reason for gold moving higher on the release of the FOMC statement today, it still looks like it’s trying to head towards the 1723 level!  Price normally doesn’t move in a straight line, so expect some pullbacks along the way if it does continue higher!


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.