2023-02-07 • Updated
Gold is one of the most popular trading assets in the world, with a several age history and an unbelievably large market capitalization of $11 trillion. There are 100 ounces of gold in 1 lot, and it is a $1.8 million order size. Therefore, if you want to control your trades in the FBS trader application or Meta Trader 4/5, you can trade as little as 0.01 lot of gold (which is only 1 ounce of the metal). This article will guide you through the possible outcomes for the current gold movement after the US reveals their economic data and clarifies the amount of future rates hikes. So get yourself comfortable, and let’s start!
Gold had dozens of fruitful movements in both 2020 and 2021. When the world thought the economy was about to recover, our shiny friend lost 19% of its capitalization in several months. But then, another coronavirus strain emerged. So it doesn’t matter whether you are a bull or a bear trader; gold movements in 2021 gave opportunities to everyone, with 13% surges and 11% plunges.
Next week we will have a couple of events that will affect the gold price. The first is the US core retail sales on February 16, 15:30 GMT+2. It shows a change in the total sales value at the retail level, excluding automobiles. High numbers mean economic strength. Thus, gold might slide lower after the release. The second is FOMC meeting minutes, where we will get more information on rate hikes and monetary tightening. The record will be available on February 16, 21:00 GMT+2. Hawkish tones from the Fed members will press on the gold. You can get the data first in FBS economic calendar; it is fast, convenient, and easy to use.
Expectations of rate hikes, inflation concerns, and coronavirus pressure the gold price. The market is about to decide the fate of the metal for 2022. As far as we know, this year, five rate hikes are expected to fight inflation both in the US and in other countries. Due to relatively slow economic recovery, money flows not to the gold but to even more defensive assets, like the Japanese Yen and Swiss Franc. We expect that if the inflation stops at current levels (7-8%), XAU/USD will struggle to rise and may slide down to 2020 levels ($1700-1600).
As for February, gold may reach the upper border of the descending trendline at $1855, and it is the perfect opportunity to wait for a reversal or a breakout of this level. (Enter the trade only after the confirmation from the chart).
XAU/USD daily chart
Resistance: 1850; 1870
Support: 1790; 1765; 1725
On the bigger timeframe, gold is moving sideways in the symmetrical triangle. Triangles are tricky price formations as they often work poorly. The best way to predict the future price movement is to wait for a breakout and then trade in the breakout direction. Apart from technical indicators, we think gold will be weak for the next several months due to rates hikes and economic recovery. We expect the metal to reach $1725 and $1685 levels in the 2-3 months. To learn more about technical analysis and get trade ideas daily, visit the FBS website; we post our daily thoughts on the market and are sure you’ll find them helpful.
XAU/USD weekly chart
Resistance: 1870; 1915
Support: 1765; 1725; 1685
You can trade XAU/USD contract for difference with FBS. It doesn’t matter whether you are buying or selling; you have the same sweet conditions for all your trading desires. And the best time to open a trade is now. Good luck!
Bearish scenario: Sell below 2200 / 2194 ... Nearest bullish scenario: Buy above 2197... Bullish scenario after retracement: Consider buys around each indicated demand zone
Bullish scenario: Intraday buys above 2160.00 with TP: 2171 and TP2: 2177 // Bearish scenario: Sells below 2177 with TP1: 2150, TP2: 2142, and 2126
This article uses price action and volume profile techniques to address a fundamental and technical perspective based on the daily chart analysis of spot gold (XAUUSD).
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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