Contributed Commentaries
Here are the events that will influence gold price this week
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold prices are well on track to close in negative territory for this month as there are only two trading days left. The price has been trending lower for the past four months, and a close in negative territory will only create more panic among investors who are concerned about the price action. Many investors have been holding onto their gold investments in hopes of a rebound, but the continuous downward trend has left them worried about their portfolios. The declining gold prices have also raised questions about the overall health of the economy, as gold is often seen as a safe haven during uncertain times. With only two trading days remaining, all eyes are on the gold market to see if it can reverse its downward spiral or if investors will need to brace themselves for further losses.
This week is an important week for the gold price, as investors are going to pay close attention to a number of critical economic events that will unfold. First, on the economic docket, we have the US consumer confidence data, which will be released at 15:00 PM UK time. The forecast for the data is 116, and the previous number was 117. A strong consumer confidence number is likely to bring strength to the dollar index, which could exert more pressure on the gold price. Later in the day, we will have the US JOLTS job opening numbers. These numbers will provide insight into the strength of the US labour market and could impact investor sentiment. If the JOLTS job opening numbers show a significant increase, it could be seen as a positive sign for the economy and potentially lead to a decrease in the gold price as investors shift towards riskier assets. However, if the numbers disappoint, it could fuel concerns about the recovery and lead to a potential increase in the gold price as investors seek safe-haven assets.
Later in the week, investors will be looking at three other important events, namely, the US ADP data and the US GDP data, both set to be released on Wednesday. And the US NFP numbers, which will be released on Friday. These three data releases will provide further insight into the strength of the US economy and its recovery. If the ADP data, which measures private sector employment, and the GDP data, which indicates the overall growth of the economy, show positive results, it could boost investor confidence and potentially lead to a decrease in the gold price as risk appetite increases. On the other hand, if the numbers disappoint, it could further fuel concerns about the recovery and lead to a potential increase in the gold price as investors seek safe-haven assets. Overall, these economic events will continue to play a crucial role in determining the direction of the gold price in the near term.
Technical Analysis
In terms of trading gold, a number of factors come into play; however, from a technical price perspective, it is clear that significant support is still near the 1884 price level, which is shown on the chart below. If the economic numbers scheduled to be released today and later in the week show improvement in the economy, we could see the price retesting this price point. However, if the narrative changes to a level where traders begin to anticipate fewer chances of an interest rate hike from the Fed, which leads to a weakness in the dollar index, it could push the gold price towards the resistance level shown on the chart below.
Chart provided by Exness
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