XAU/USD

Gold just posted its highest monthly close on record, and now trades less than $40 from its record high set in May. With seasonality on its side, I suspect another crack at the record high could be in order. Although it does run the risk of a shakeout around the milestone level.

It seems the dollar correction is finally underway, with the US dollar index suffering its worst single day in one year. And it shows the potential for further losses, even if it has found support for now. Gold also shows the potential to have another crack at $2000.

Gold prices suffered their worst day in 8 weeks on Tuesday with spot prices falling below the 200-day EMA and closing on the key $1900 level. But with gold lower against a basket of currencies, it shows gold is weaker and it's not just a case of a stronger USD or yields.

Despite competing with the strength of the dollar, gold has been trading higher against all other major currencies since its low in August. This could suggest that gold is acting as a safe haven, even if it is not immediately obvious from the XAU/USD chart.

Hawkish FOMC minutes caught markets by surprise which saw US bond yields and the USD continue to rise and sending Wall Street lower for a second day. Whilst spot gold closed beneath 1900, futures have not - so perhaps support awaits). USD/JPY is soaring higher despite a warning from the MOF. And now the ASX reached my first bearish target, I’m now wondering if it can it reach for the second.

The day has finally rolled around for today’s US inflation report, which likely has the power to sway the Fed’s next interest rate decision. So today we look at key levels for EUR/USD and gold ahead of the key CPI report.

Gold prices snapped a four-week winning streak with XAU/USD now testing multi-month uptrend support. Battle lines drawn on the weekly technical chart.

On Wednesday, the gold outlook dimmed further as investors assessed the main message coming from this week's Sintra conference – that more policy tightening is on the way – and decided to punish the metal further.

The gold outlook has improved because of a drop in US dollar and bond yields, following the release of more disappointing US data.

While the metal may well extend its drop in the short-term, my longer-term gold outlook remains positive. I therefore envisage a rise to a new record high soon.

Today’s US inflation report could be the difference between a 25bp Fed hike or pause at their May meeting, making it a key data point to watch.

Renewed weakness in bond yields and US dollar, thanks to soft US data, has brightened the gold outlook

Following tense weekend talks, UBS has agreed to purchase Credit Suisse by the end of the year for Fr 3 billion ($4.5 billion).

For gold to make a stronger recovery, we will have to see a surprise miss on Friday’s NFP

Gold prices are poised to mark an outside-weekly reversal off a key technical support pivot- bears on notice. The levels that matter on the XAU/USD weekly chart.

Markets cannot get enough of US inflation data at present and what it means for the Fed. And that means today’s PCE figures are now likely the more important.

Gold may be on the quiet side now, but it’s unlikely to remain the case if the FOMC minutes go as we suspect.