Two Trades To Watch: Gold, FTSE - Thursday, May 20

Gold looks towards 3 month high despite Fed taper talk. FTSE looks to retake 7000.

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Gold looks to 3 month high despite Fed’s taper talk 

Gold (GLD) saw a volatile session on Wednesday amid the collapse of the crypto market and after the minutes to the FOMC. 

Investors selling out of crypto could be buying into gold, lifting the price as most major cryptos lost around 30% in the crash. 

The minutes to the Fed meeting revealed that members are ready to start the tapering debate in coming meetings, which sent yields and the USD higher dragging on gold. 

Today, as the market continues digesting the minutes yields are retreating giving gold space to continue its recovery. 

US weekly jobless claims will be in focus. 

Where next for Gold price? 

The gold price trades within an ascending channel dating back to early April in a clear upward trend. The trend remains intact despite yesterday’s selloff. 

The RSI is heading into overbought conditions so a period of consolidation could be on the cards before further gains. 

Gold is attacking resistance on the upper band of the ascending channel at 1875 which is also horizontal resistance the high January 25. A break above here could see yesterday’s high and a three month high of 1890 come into focus ahead of 1900.  

A move below 1844 the descending trendline support  and horizontal support could negate the near term uptrend and open the door to a deeper selloff.  

FTSE looks to test 7000

The FTSE, in line with its European peers, is heading higher, despite a weak handover from the US. 

Fed minutes revived taper jitters hitting sentiment for riskier assets.  

Today the tone is more promising amid the easing of lockdown restrictions in Europe and growing optimism that the covid vaccine is effective against the Indian variant.

Rising commodity prices could help lift heavyweight resource stocks & oil majors.

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