Gold Hits 7-Month High as Central Banks Admit Defeat
Gold Futures, 4-Hour Chart Analysis
We had a very interesting Friday in financial markets as following the cautious words by Mario Draghi following the ECB’s rate decision, the Fed and the PBOC quickly replied with their own dovish steps. The Chinese central bank launched its own quasi-quantitative easing program following several major liquidity injections in previous weeks, while the Fed is now reportedly looking into ending its quantitative tightening program earlier than expected.
Especially the Fed’s shift, which came a bit more than one month (and a market rout..) after Chairman Jerome Powell’s words that the tightening program is on autopilot, caused turmoil in markets, sending the Dollar tanking against its major peers. With this development, next week’s Fed meeting just got more interesting, and especially currency traders could be in for a wild ride, but the main beneficiary might be gold.
While the Yen the Euro and especially the Great British Pound gained significant ground on Friday, gold actually broke out to a new 7-month high, as the brief period of strong global growth and hawkish central banks is now definitely over. Given the precious metals relative strength, we expect the rally to continue, with a possible swift rally up to the key resistance zone near $1360. The next days will be crucial for the fate break-out, but for now, things are looking up for the metal.
Tech giants in Focus as Earnings Season Heats Up
Dow 30 Futures, 4-Hour Chart Analysis
Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL) have been switching place in the top 3 spots of the list of the most valuable companies in recent months,