Gold Hits 4-Week Highs on Trump Jitters

Gold has edged higher in the Monday session. In North American trade, gold is trading at $1254.84 per ounce. On the release front, there are no economic indicators in the US. We’ll hear from two FOMC members – Charles Evans and Robert Kaplan. There are no US indicators until Tuesday, with the release of CB Consumer Confidence.

Donald Trump’s stunning ascendancy to the presidency last November triggered an impressive rally by the US dollar. However, market euphoria over Trump’s election win is long past. The inquiry into the Trump administration’s links with Russia continues to make headlines, and is another cause for concern for nervous investors. Trump has been in office for over two months, but he has yet to provide any details over even an outline of economic policy. Last week, Trump’s proposed bill to change Obamacare was not even voted on, as the White House was unable garner enough support to pass the bill. This latest setback for the beleaguered Trump administration could increase market jitters and send the US dollar to lower levels.

Gold prices are sensitive to rate moves, so investors continue to look for clues about what the Federal Reserve has planned for the remainder of 2017. The Fed’s rate statement and dot plot indicated that the Fed is looking at another two hikes in 2017, which would make three in total. This forecast was reiterated by Chicago Fed President Charles Evans earlier this week. Although one could make a strong case that three rate hikes in 2017 would be impressive, the markets appear disappointed, and would like four hikes, given the strong performance of the US economy. The Fed’s cautious approach has reduced investors’ appetite for risk, which has been good news for gold, a safe-haven asset.

XAU/USD Fundamentals

Monday (March 27)

  • 13:15 US FOMC Member Charles Evans Speech
  • 18:30 US FOMC Robert Kaplan Speech

Upcoming Key Events

Tuesday (March 28)

  • 10:00 US CB Consumer Confidence. Estimate 113.9

*All release times are GMT

*Key events are in bold

 

XAU/USD for Monday, March 27, 2017

XAU/USD March 27 at 12:40 EST

Open: 1252.91 High: 1261.09 Low: 1252.36 Close: 1254.84

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1174 1199 1232 1260 1285 1307
  • XAU/USD edged higher in the Asian session. The pair was flat in the European session but and has posted small losses in North American trade
  • 1232 is providing support
  • 1260 is the next resistance line
  • Current range: 1232 to 1260

Further levels in both directions:

  • Below: 1232, 1199, 1174 and 1146
  • Above: 1260, 1285 and 1307

OANDA’s Open Positions Ratio

In the Monday session, XAU/USD ratio is showing long positions with a majority (59%). This is indicative of trader bias towards XAU/USD continuing to move higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.