The price of gold traded higher in the last week due to the recent weakness of the green buck’s strength. In last Friday in the FED meeting, Janet Yellen expressed didn’t come up with a clear tone about next interest rate hike decision for which the dollar bulls lost their strength in the global market to a certain extent. Since the price of gold is measured in a dollar a significant change in the U.S interest rate decision impact the gold market significantly. A higher interest rate usually results in the decline in the price of gold but the gold buyers are pushing the market higher as there is no sign of interest rate hike decision in near future. Most importantly the U.S consumer sentiment is also turning negative in the global market as Mr. Trump failed to keep his promise regarding increased fiscal spending and tax cut policy. During the U.S presidential election held on 8th November 2016 the dollar gained a significant strength in the global market and pushed the price of gold lower but over the period of time the market has digested the U.S president statement and now reacting to the fact. All the professional traders are now cautious since the green bucks are still holding its ground as there is three possible rate hike in the year 2017.
Gold edges higher on Friday: In last Friday the price of gold started its bullish rally in the market after hitting the minor support level at 1180.76 and traded at $1191.06 prior to the market closing. According to the New York Mercantile Exchange in the Comex division, the gold market gained near about 0.03% in the global economy and traded at $1190.15.The bullish rally in the last commodities trading session helped the gold market to close with a 1% gain. The price of silver futures also gained 1.79% on the Comex division and traded at $17.15 a troy ounce. On the other handed the price of copper futures gained near about 0.67% in the global economy and traded at $2.691 in the market. The FED rate hike monitor tools suggest that near about 95% think that the U.S central bank will hold pat in near future. Most of the professional gold buyers are overly cautious at this moment since due to project three rate hike by the FED in the year 2017.Moreover, the central bank will also create pressure to the FED for at least two rate hike before the month of November so that they can adjust their current inflation rate to bring economic stability in the country.
Leading researcher’s sentiment: Most of the leading gold investors are now in doubt since they are don’t know about the next movement of the gold price. The gold bulls were fuelled in the market after the disappointing growth in the U.S economy which was near about 1.9% in the fourth quarter of 2016 where’s as the expected data was 2.2%.However, the last three month performance of the U.S economy was significantly well and it gained near about 3.5 % in the global economy till September in the last year. On the country, there have been a drop in the U.S durable goods orders for about 04% in the last month in contrast to the recent expectation of 2.6% gain. However, the price of gold is still in vulnerable position as Mr. Trump again influenced the consumers by saying that 20% tax will be implemented on the Mexican goods and such a promising statement again created some floor for the green bucks in the global economy. On the other hand, the price of U.S dollar index is hovering near a critical support level in the global market and a decent rise in the U.S dollar index might create some selling pressure in the gold market.
A possible scenario of the gold market: The price of gold has rebound back in the global market after hitting the critical resistance level at 1219.05 in the global market. However, there has been a decent bullish bounce in the gold market after it hit the critical support level at 1180.76 in the global market. Most of the professional gold traders are expecting another bullish rally in the gold market in the upcoming week. However, the traders will be extremely careful in trading the gold in this week as the FOMC statement is there on the upcoming Thursday. If the FED come up with a hawkish statement in their FOMC statement then there is strong chance that the price of gold will tumble in the market in the last part of this upcoming week. In the next Friday, there is also Average Hourly Earnings m/m data release in the market and the expected data is 0.3% gain. If the data comes better than the expected value then we will see a decent drop in the price of gold prior to the next wee closing.
Summary: The price of gold is nicely paving its way higher in the global market making new higher highs which are a classic characteristic of the uptrend in the market. The professional gold investors are buying the major support level of the gold as Mr. Trump failed to keep his promise regarding tax cut policy and the increment in the fiscal spending.Despite the recent weakness of the green bucks the dollar is still holding its ground in the global market as FED declared projected three rate hike in the year 2017 which might create an extreme level of selling pressure in the gold market.