Gold Price Forecast: Bullish Momentum Unravels Following US GDP Report

Gold Talking Points

The cost for bullion slips to a uninformed weekly-low ($1317) as a U.S. Gross Domestic Product (GDP) news shakes adult a opinion for financial policy, and a unsuccessful try to exam a 2018-high ($1366) might beget a incomparable improvement in a changed steel as a bullish movement starts to unravel.

Image of daily change for vital currencies

Gold Price Forecast: Bullish Momentum Unravels Following US GDP Report

Image of daily change for bullion prices

Gold is behind underneath vigour as uninformed updates to a U.S. GDP news uncover a enlargement rate expanding 2.6% in a fourth-quarter of 2018 contra projections for a 2.2% print, and a developments might lean a opinion for financial process as a core Personal Consumption Expenditure (PCE), a Federal Reserve’s elite sign for inflation, suddenly climbs to 1.7% from 1.6% per annum during a three-months by September.

The certain growth might inspire Fed officials to fist in a rate-hike after this year as cycle as a executive bank pledges to be ‘data dependent,’ yet a ongoing change in trade process might inspire a flourishing array of Fed officials to adjust a Summary of Economic Projections (SEP) during a subsequent assembly in Mar as U.S. Trade Representative Robert Lighthizer warns that ‘much still needs to be finished before an agreement can be reached’ with China.

Image of fed change sheet

In turn, a Federal Open Market Committee (FOMC) might continue to change a change over a entrance months amid a ‘crosscurrents’ clouding a mercantile outlook, and a stronger-than-expected GDP imitation might do small to revitalise a hawkish forward-guidance for financial process as Chairman Jerome Powellwarns of ‘muted’ inflation. In fact, it seems as yet a FOMC is preparing to finish a $50B/month in quantitative tightening (QT) as Chairman Powell states that ‘the Committee can now weigh a suitable timing and proceed for a finish of change piece runoff, and a change in a financial process opinion might continue to worsen a seductiveness of bullion as a executive bank appears to abandoning a hiking-cycle.

With that said, a broader opinion for bullion stays constructive, yet a changed steel might theatre a incomparable pullback over a entrance days as a bull-flag appears to have run a course. At a same time, new developments in a Relative Strength Index (RSI) advise a bullish movement will continue uncover as it falls behind from overbought domain and snaps a ceiling trend from late-last year. Sign adult and join DailyFX Currency Analyst David Song LIVE for an event to plead intensity trade setups.

Gold Daily Chart

Image of bullion daily chart

  • Lack of movement to exam a 2018-high ($1366) might hint a incomparable improvement in gold, with a new growth lifting a risk for a serve decrease as a cost for bullion triggers a array of reduce highs lows.
  • In turn, a tighten subsequent a $1315 (23.6% retracement) to $1316 (38.2% expansion) segment brings a former-resistance section around $1298 (23.6% retracement) to $1302 (50% retracement) on a radar, with a subsequent segment of seductiveness entrance in around $1279 (38.2% retracement) to $1288 (23.6% expansion).

For some-more in-depth analysis, check out a 1Q 2019 Forecast for Gold

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— Written by David Song, Currency Analyst

Follow me on Twitter during @DavidJSong.