Gold updates annual highs leaving for the weekend with intrigue

Amid weaker US dollar and risk-off mood, when large investors, fleeing uncertainty, pack their assets in safer harbors, gold continues to be the "star" of the market.

The decline in the yield of 10-year US bonds, the consequences of the hurricane Harvey and approaching Irma, the remaining tension around North Korea's nuclear tests - all these factors weigh on the dollar and support gold.

Even the outgoing statistics are now not in favor of the dollar. The latest weekly data on jobless claims in the US came out disappointing. This increased already decent pressure on the American currency. The decision of the ECB to maintain the parameters of monetary policy was not unexpected, but the estimates of the prospects for economic growth were improved. And that was not a surprise that players again sold the dollar and bought the euro.

As a result, yesterday, gold again updated the annual highs and ended the day around 1349 dollars per ounce. It should be noted that after the break through the last significant level of $1300, the upward trend in gold has intensified. Today, during the trading session in the Asian session, the yellow metal continued to gain and the previously announced goal $1352 was achieved. After a small corrective pullback, longs resumed at $ 1346- $ 1348. Of course, technically the market is overbought, but now nobody cares of it. In moments of rally, traders do not pay attention to such technical factors.

Let's see how the situation will develop over the weekend. If the DPRK, in honor of the country's founding day, again launches a ballistic missile or conducts another nuclear test, gold market will open with the gap up on Monday.

Eur / Usd uptrend continues

Despite the bearish signals that appeared earlier, the uptrend in the pair remains intact, and this coincided with our expectations.

Yesterday, all the attention of market participants was drawn to the ECB meeting and the subsequent press conference of Mario Draghi.

The ECB's decision on the rates did not surprise anyone, all attention was directed to the press conference. The volatility of trading significantly increased as Eur/Usd managed to decrease to 1.1930, and then to rise to 1.2052 in the first half hour. And finally, despite all attempts by the head of the ECB to exert pressure on the euro, the bulls continued to aggressively buy the euro.

Now, to confirm their ambitions euro bulls should close the week above the previous highs of 1.2070. Only in this case there will be a breakdown of the reversing "Falling Star" model and there will be prospects for growth towards new goals higher.

Fort Financial Services