Gold climbs to 4-week high as risk apprehension jumps

Gold has posted strong gains to kick off the week. In Monday’s North American session, the spot price for one ounce of gold is $1322.50, up 0.69% on the day. The metal is currently at its highest level since the end of February. On Tuesday, the U.S. publishes building permits and CB consumer confidence.

Nervous investors is usually good news for gold, which is a safe-haven asset. Investors have been in a sour mood since the Federal Reserve policy meeting on Wednesday. The Fed has been dovish since the start of the year, but the Fed was much more dovish than expected last week. The Fed’s dot plot indicated that rate levels will remain on hold for the rest of 2019, and the Fed also lowered its growth forecast for 2019 to 2.1%, down from 2.3% in December. There was more bad news on Friday, as the spread between 3-month and 10-year Treasury notes turned negative for the first time since 2007. This is known as an inverted yield curve, which is considered a recession indicator. Stock markets dropped sharply late last week and the downward trend has continued on Monday. This has been good news for gold, which has climbed close to 1.0% since Thursday. If risk apprehension remains strong, traders can expect gold to continue to climb.

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XAU/USD Fundamentals

Monday (March 25)

  • 2:00 US FOMC Member Evans Speaks
  • 20:30 US FOMC Member Rosengren Speaks

Tuesday (March 26)

  • 8:30 US Building Permits. Estimate 1.32M
  • 10:00 US CB Consumer Confidence. Estimate 132.1

*All release times are EST

*Key events are in bold

XAU/USD for Monday, March 25, 2019

XAU/USD March 25 at 11:55 DST

Open: 1313.67 High: 1322.98 Low: 1311.12 Close: 1322.50

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1261 1284 1306 1326 1344 1365

XAU/USD edged higher in the Asian session and posted stronger gains in European trade. The pair edged lower in European trade but then recovered. XAU/USD continues to post gains North American trade

  • 1306 is providing support
  • 1326 is the next resistance line
  • Current range: 1306 to 1326

Further levels in both directions:

  • Below: 1306, 1284, 1261 and 1243
  • Above: 1326, 1344 and 1365

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.