Last updated on July 2nd, 2019 at 03:11 pm
Gold is Gaining Across the Board
At the time of writing, spot gold traded at $1386, up nearly 2% on the day. But in the early Asian session, it was the Australian gold bulls that were gleaming with joy as gold spot versus the AUD crossed above $2000 to trade at record highs.
Against the Australian dollar, gold broke above the notable 2011 high in December the first time around. However, the break was not sustained. After several attempts, the yellow metal scaled above the significant horizontal level in early May on a sustained basis. XAUAUD was last seen trading at $2007, up about 1.6% on the day and nearly 7% for the month.
The Fed Meeting Triggered a Broadly Weaker Dollar
Policymakers were not as dovish as the markets may have been pricing in, but they didn’t give dollar bulls much reason for hope. The US dollar index fell after the rate statement and inched lower during the press conference. In the Asian session, however, it saw some renewed selling pressure.
Asian trading can be tricky at times. Since the market generally does not move assets significantly in one direction or not, it is unpredictable whether European traders will try to fade this price action seen overnight.
One thing is for sure, there will be a lot of traders waking up to their screens this morning wondering how they missed the move in gold. And also, how they might still be able to get on board.
The major $1350 level discussed at the start of the week in the weekly forecast has been breached. This was significant on many levels, please read the weekly forecast for full details.
Of course, a retest of the level is very likely to be defended. The question is, will the yellow metal pull back that far to give traders a second opportunity.
Billionaire investor Paul Tudor Jones recently said that if gold can get above $1400, it can quickly get to $1700. Indeed, there does seem to be some resistance at $1400. So far, the shiny metal has reached a high of $1393 and has pulled back.
On the chart above, the level of resistance is highlighted at $1392. This price point marks the 2014 spike high and stands to limit gains over the near-term.
A dip to $1350 would be great for buyers if it happens. Ahead of that, it might be worthwhile keeping an eye out on $1375 which reflects the 2016 high.