Gold Bounces $30 Higher Off the 200 Daily SMA on Banking Fears
Gold turned massively bullish in November last year, as the FED started to give dovish signals, but retreated in February as the US economy was showing signs of a rebound. But, the economy has slowed in recent months and the FED is preparing to deliver the last 25 bps hike today, which has been keeping Gold in demand.
Although, XAU retreated off the highs and was trading around $2,000 for a couple of weeks. Yesterday though, the banking fears returned, with banking shares of certain banks falling by around 30% at some point. The KRE ETF of regional banks traded down -6.37% on the day, which sent safe havens such as GOLD and the JPY higher.
Yesterday, the USD slipped lower due to lower-than-anticipated JOLTS data. Job openings totaled 9.595M, which was less than last month’s 9.775M and it also missed expectations. This number marks a two-year low, but it is still higher than pre-COVID levels, which were around 7.0M to 7.5M.
These events took place just before the FOMC meeting which will take place later today, where the FED is expected to raise rates by 0.25% to a range of 5.00% to 5.25%. At the last meeting, the FeD dot plot predicted a terminal rate of 5.11%, which will be the midpoint of the target range if a 25 basis point hike occurs tomorrow.
So, Gold jumped to $2020 yesterday, breaking above the 100 SMA (green) which was acting as support. Gold was trading between this moving average at the top and the 200 SMA (purple) at the bottom on the H4 chart, for two weeks, but yesterday the breakout happened and if the FED hike is dovish today, we might see new record highs in Gold. We are following the price action and are looking for a retrace lower where we can open a buy Gold signal.
Alerts
Rates
Calendar
Signals
Top Broker