Gold breaks through a multi-year resistance zone – strong buy!
Last Wednesday, the eyes of the market were on the Fed rate decision and their projection for the US economy, as well as the proposed monetary policy decisions from the Fed.
While the US central bank did not cut rates, markets found several hints in the Fed statement for several cuts in the second half of 2019 (e.g. in the Fed Dot plot), starting with the next meeting in July where the Fed Watch Tool now shows market participants expecting a cut with a 100% probability.
As a result, Gold pushed already to new yearly highs on Wednesday and took out the multi-year-resistance zone around 1,360/365 in the early hours of trading on Thursday.
As we discussed in our weekly market outlook last Monday, A break higher and above 1,360/365 can be considered a strong mid-term buy-signal which sees a projected target somewhere around 1,700 USD, and possibly even higher.
That said, under the given fundamental and technical outlook, the current device in Gold seems clearly to be 'Buy the dip', with finding an interesting first long-trigger around 1,360/365 USD.
In general, the bullish picture in Gold on a daily time-frame stays active as long as we trade above 1,266 USD.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
While the US central bank did not cut rates, markets found several hints in the Fed statement for several cuts in the second half of 2019 (e.g. in the Fed Dot plot), starting with the next meeting in July where the Fed Watch Tool now shows market participants expecting a cut with a 100% probability.
As a result, Gold pushed already to new yearly highs on Wednesday and took out the multi-year-resistance zone around 1,360/365 in the early hours of trading on Thursday.
As we discussed in our weekly market outlook last Monday, A break higher and above 1,360/365 can be considered a strong mid-term buy-signal which sees a projected target somewhere around 1,700 USD, and possibly even higher.
That said, under the given fundamental and technical outlook, the current device in Gold seems clearly to be 'Buy the dip', with finding an interesting first long-trigger around 1,360/365 USD.
In general, the bullish picture in Gold on a daily time-frame stays active as long as we trade above 1,266 USD.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.