Gold Prices Reverse Ahead Of 2019-Low Following Dovish ECB, Weak NFP

In turn, the FOMC may continue to drop the hawkish forward-guidance for monetary policy at its next interest rate decision on March 20, and the current environment may continue to heighten the appeal of gold as macro-techs, with all the wild swings of the past 15 months, suggest the market could be undergoing a major long-term topping process. Moreover, recent price action instills a constructive outlook for gold as the decline from the yearly-high ($1347) appears to have stalled ahead of the January-low ($1277), with the Relative Strength Index (RSI) also highlighting a similar dynamic as it comes up against trendline resistance and threatens the bearish formation carried over from the previous month.


(Click on image to enlarge)

Image of gold daily chart

  • Failure to snap the yearly opening range instills a constructive outlook for gold, with the price for bullion at risk for a larger advance as it attempts to break out of a narrow range, with the RSI at risk of flashing a bullish trigger.
  • In turn, the lack of momentum to test the 2019-low ($1277) may bring the topside targets back on the radar, but need a break/close above the $1298 (23.6% retracement) to $1302 (50% retracement) to open up the Fibonacci overlap around $1315 (23.6% retracement) to $1316 (38.2% expansion).
  • Next region on interest comes in around $1328 (50% expansion) to $1329 (50% expansion) followed by the $1340 (61.8% expansion) region.
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