Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Will Gold Join USD As A Safe Haven?

By Mike WolfCommoditiesDec 16, 2018 05:37AM ET
www.investing.com/analysis/gold-forecast-will-gold-join-the-usd-as-a-safe-haven--200368457
Will Gold Join USD As A Safe Haven?
By Mike Wolf   |  Dec 16, 2018 05:37AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

What Gold Bulls Need: A weaker U.S. dollar, lower U.S. inflation-adjusted real yields, and volatility in the equity space. If there is a slowdown in the U.S. economy, a slowdown in the equity market, and continued geopolitical risk, there is nothing other than Gold that stands out the go-to safe-haven.

The U.S. Dollar has taken safe-haven attention away from Gold and Silver.

Some analysts believe that the U.S. dollar peaked in 2018 and Gold is expected to trade north of the critical 1.300 USD resistance level next year.

After a disappointing year, gold is looking to recover and make new gains in 2019, with the help of dovish comments from Fed members. The below the expectations Nonfarm Payrolls release last Friday, coupled with a weakening stock market, has the market expecting the Fed will turn cautious next week and slow the pace of rate hikes in 2019.

A large part of future U.S. dollar moves will depend on the level of hawkishness or dovishness of the Federal Reserve and the markets will look for a clear sign in the FOMC statement and Powell’s speech on Wednesday. If the Fed chairman indicates a pause in the rate hiking cycle now, a decline in DXY and Dollar Sell-off may start which would help Gold’s recovery.

The Fed has a difficult predicament to contend with regarding the current dot-plot. On one hand, they need to keep moving rates higher in order to try and avert a massive pension crisis building in the state and municipal levels. On the other hand, lobbying is growing intense for the Fed to pause with stock markets in turmoil due primarily to a rising U.S. dollar squeezing global debt as much of this debt is denominated in the world’s reserve currency. “Shortly; the strong USD is killing the stock markets. Stop the rate hikes”. The Fed’s choice will determine the direction of Gold Prices.

Another component of the matter is the political turmoil in Europe. The deadline for a Brexit deal is March 29, 2019 and Italy’s budget battle with Brussels remains a concern as well. With a growing lack of confidence in Europe, more safe-haven bids may continue into both gold and the U.S. dollar. Thus far, investors have turrned toward the USD instead of Gold as a safe haven.


Technical Analysis:
On the daily chart, Gold is trading on an ascending bullish trendline. XAU/USD ended the week at 1238 USD above EMA 50 and positive territory of the Ichimoku Cloud. We can say the short-term trend is still Bullish.

Key Levels on The Daily Chart:

*1252 – SMA 200 on Daily Chart
*1265 – SMA 100 on Weekly Chart

The midterm bearish trend will remain as long as the prices stay below 1265 USD. A few daily closing above 1265 USD will be the signal of the midterm trend reversal from bearish to bullish. In this case, we can start to talk about 1281, 1296 and 1300 USD.

  • On the H4 Chart, Gold ended the week at 1238 the bearish territory below EMA 50. Technical readings indicate the continuation of the bearish move. On the downside, we have 2 key levels 1230 and 1226 USD. I believe that the potential breakout of 1226 USD will call the bears back to the arena with much more appetite sending the prices 1218 and 1210 USD.


My Plan: I will keep my short positions – my stop loss at the entry 1250 USD– targeting 1226 USD. I will add short positions if the prices break below 1226 USD and my targets will be 1218 and 1210 USD. If the Fed does not sound like soft dovish as market participants are expecting, we may see the prices breaking key support at 1210 USD and heading South towards 1.178 and 1.150 USD.

Gold H4 Chart
Gold H4 Chart

XAU/USD Daily
XAU/USD Daily

Disclaimer: This chart has been published for educational purposes only and cannot be considered as a trading advice. This analysis prepared by the global analysts of Chartreaderpro.com and published on Investing.com. Commercial distribution is strictly prohibited.

Will Gold Join USD As A Safe Haven?
 

Related Articles

Will Gold Join USD As A Safe Haven?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Commodity Stalker
Commodity Stalker Dec 16, 2018 5:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good luck with that trade, because your going to need it lol.
David Erfle
David Erfle Dec 16, 2018 10:19AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Imitation is the best from of flattery:. https://www.kitco.com/commentaries/2018-12-14/Gold-and-the-Miners-Join-the-U-S-Dollar-as-a-Safe-Haven.html
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email