Thursday, 14 March 2019
Gold
Labels:
fundamental review
During the Wednesday session, gold demonstrated increase of more than 0.8% thanks to dollar support and a relatively high demand for the defensive stocks.
The domestic statistics announcement once again caused pressure on the dollar index. Basic orders for the durable goods in the United States in January decreased by 0.1%, while experts expected the figure growthe by the same amount. At the same time, the previous figure was revised to the better range from + 0.1% to + 0.3%. The producer price index that is one of the leading indicators of the consumer inflation also did not reach the forecasted value, the fact is 0.1% while the forecast is 0.2%. As a result, the dollar index finished day by lowering more than 0.7%.
A whole series of inconclusive domestic statistics reinforces investors' concerns about the prospects for the development of the American economy and generally justifies a significant easing of rhetoric at the end of the Federal Reserve System. This is a strong medium-term support factor for the yellow metal.
Today, during the Asian session, gold is declining on the recovery of the dollar index. The US currency closed four negative trading days in a row, so despite the continued pressure, the development of a correctional wave is expected, especially on the background of the absence of the important statistical reports in the United States. Therefore, the potential growth of gold quotes today is likely to be limited. On the other hand, the situation in the stock markets can support the demand for the yellow metal. Most indexes today are traded in the red zone against the background of the next publication of weak statistics from China, as well as the continuing uncertainty around the Brexit. According to the presented report, the volume of industrial production in China in February grew by 5.3% (forecast 5.5%), while a year earlier the growth reached 5.7%.
Yesterday, gold tested a strong intermediate resistance level of 1310.00, from which a correctional wave is now developing. Taking into account the fact that the closest strong support level is now located in the area of 1298.00, today we can expect a continuation of the rolling move in the direction of this level, since there are no signals indicating the end of the correctional wave at shorter timeframes.
Resistance Levels: 1310.00, 1315.00, 1320.00;
Support levels: 1298.00, 1290.00, 1285.00.
The main scenario - a decline to 1298.00.
The alternative scenario is consolidation above 1305.00 and retest 1310.00.
In the medium term, the scenario with the gold quotation growth remains possible but locally the contract is under pressure now, so taking into account chart signals , intraday preference should be given to short positions at the range of 1310.00.
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