BoE's Breeden: Less concerned that rates might need to be tightened further
7 February 2024, 11:02
Bank of England (BoE) Deputy Governor Sarah Breeden said on Wednesday that she is less concerned that the bank rate might need to be tightened further, as reported by Reuters.
"My focus has shifted to thinking about how long rates need to remain at their current level," Breeden added and noted that she needs to see further evidence to be confident that the UK economy is progressing as set out in the BoE forecasts.
Market reaction
GBP/USD showed no immediate reaction to these comments and was last seen rising 0.17% on the day at 1.2620.
7 February 2024, 11:02
Bank of England (BoE) Deputy Governor Sarah Breeden said on Wednesday that she is less concerned that the bank rate might need to be tightened further, as reported by Reuters.
"My focus has shifted to thinking about how long rates need to remain at their current level," Breeden added and noted that she needs to see further evidence to be confident that the UK economy is progressing as set out in the BoE forecasts.
Market reaction
GBP/USD showed no immediate reaction to these comments and was last seen rising 0.17% on the day at 1.2620.
Central Banks as Buyers of Gold
Gold is the world’s oldest consistently used currency with close to 5,000 years of history. Admittedly, most people in 2024 might not think of gold as being a currency at all. It’s not in daily use, like in buying coffee, cars or homes. That said, the world’s central banks clearly view gold as a currency – or at least a reserve asset – and since the global financial crisis (GFC), they have been buying more and more of it (Figure 1). Many years of near-zero or even negative interest rates set by central banks combined with quantitative easing (QE) and various sanctions regimes led many central banks to favor gold over central-bank-issued currencies. Neither the recent uptrend in rates nor the reversal of QE appear to have assuaged those concerns.
Figure 1: After decades as net sellers, central banks became net buyers of gold after the financial crisis
Figure 1: After decades as net sellers, central banks became net buyers of gold after the financial crisis
Source: CPM Group Gold Yearbook 2023, CME Economic Research Calculations, Bloomberg Professional (CPI INDX)
The central banks’ post-GFC gold buying contrasts sharply with the time when central banks were net sellers of gold from 1982 to 2007. This implies that pre-GFC central bank policy entrusted fiat currencies like the U.S. dollar, euro, yen, pound and Swiss franc as reserve assets more than gold. This relationship reversed since the GFC. By all accounts, that tendency continued in 2023 despite central bank rate increases boosting returns on fiat currencies to their highest levels since 2007.
Central banks aren’t the only ones who tend to see gold as a currency. Strong and consistently negative correlations between gold and the Bloomberg Dollar Index (BBDXY) suggest that traders also see gold as an alternative to the U.S. dollar, not entirely unlike the currencies in Bloomberg’s Dollar Index such as the euro and yen (Figure 2).
Gold is the world’s oldest consistently used currency with close to 5,000 years of history. Admittedly, most people in 2024 might not think of gold as being a currency at all. It’s not in daily use, like in buying coffee, cars or homes. That said, the world’s central banks clearly view gold as a currency – or at least a reserve asset – and since the global financial crisis (GFC), they have been buying more and more of it (Figure 1). Many years of near-zero or even negative interest rates set by central banks combined with quantitative easing (QE) and various sanctions regimes led many central banks to favor gold over central-bank-issued currencies. Neither the recent uptrend in rates nor the reversal of QE appear to have assuaged those concerns.
Figure 1: After decades as net sellers, central banks became net buyers of gold after the financial crisis
Figure 1: After decades as net sellers, central banks became net buyers of gold after the financial crisis
Source: CPM Group Gold Yearbook 2023, CME Economic Research Calculations, Bloomberg Professional (CPI INDX)
The central banks’ post-GFC gold buying contrasts sharply with the time when central banks were net sellers of gold from 1982 to 2007. This implies that pre-GFC central bank policy entrusted fiat currencies like the U.S. dollar, euro, yen, pound and Swiss franc as reserve assets more than gold. This relationship reversed since the GFC. By all accounts, that tendency continued in 2023 despite central bank rate increases boosting returns on fiat currencies to their highest levels since 2007.
Central banks aren’t the only ones who tend to see gold as a currency. Strong and consistently negative correlations between gold and the Bloomberg Dollar Index (BBDXY) suggest that traders also see gold as an alternative to the U.S. dollar, not entirely unlike the currencies in Bloomberg’s Dollar Index such as the euro and yen (Figure 2).
Gold price shows positive trades to approach testing the key resistance 2016.90, and the EMA50 meets this level to add more strength to it, while stochastic loses its positive momentum clearly to show overbought signals now.
Therefore, these factors encourage us to suggest the bearish bias in the upcoming sessions, and the targets begin by testing 1977.46, reminding you that breaching 2016.90 will stop the current negative pressure and lead the price to attempt to regain the main bullish trend again.
The expected trading range for today is between 1985.00 support and 2015.00 resistance.
The expected trend for today: Bearish
Therefore, these factors encourage us to suggest the bearish bias in the upcoming sessions, and the targets begin by testing 1977.46, reminding you that breaching 2016.90 will stop the current negative pressure and lead the price to attempt to regain the main bullish trend again.
The expected trading range for today is between 1985.00 support and 2015.00 resistance.
The expected trend for today: Bearish
Gold price is testing 2016.90 again and keeps its stability above it, and the EMA50 continues to support the mentioned level, besides stochastic move near the oversold areas.
Therefore, the bullish trend scenario will remain valid unless breaking 2016.90 and holding below it, reminding you that our waited target is located at 2065.70.
The expected trading range for today is between 2015.00 support and 2045.00 resistance.
The expected trend for today: Bullish
Therefore, the bullish trend scenario will remain valid unless breaking 2016.90 and holding below it, reminding you that our waited target is located at 2065.70.
The expected trading range for today is between 2015.00 support and 2045.00 resistance.
The expected trend for today: Bullish
The expected trading range for today is between 2135.00 support and 2165.00 resistance.
The expected trend for today: Bullish
The expected trend for today: Bullish
Gold price settles above 2144.60 level, noticing that stochastic begins to get rid of the negative momentum, waiting to get positive motive that assist to push the price to resume the expected bullish trend on the intraday and short-term basis, which targets 2165.00 followed by 2200.00 levels as next main stations.
The expected trading range for today is between 2140.00 support and 2175.00 resistance.
Trend forecast: Bullish
The expected trading range for today is between 2140.00 support and 2175.00 resistance.
Trend forecast: Bullish
Gold price remains below $2,200, bets for June Fed rate cut favour bulls
11 March 2024, 06:52
•Gold price struggles to capitalize on last week’s blowout rally to a fresh record peak.
•Extremely overbought conditions cap gains for the metal amid a modest USD uptick.
•Bets for a Fed rate cut in June act as a headwind for the USD and should limit losses.
Gold price (XAU/USD) shot to a fresh record high on Friday after the US jobs report showed a spike in the unemployment rate and bolstered expectations that the Federal Reserve (Fed) will start cutting rates in June. The momentum, however, stalled ahead of the $2,200 round-figure mark amid a late US Dollar (USD) bounce from its lowest level since mid-January, which tends to undermine the USD-denominated commodity. The precious metal remains below the said handle and attracts some intraday sellers near the $2,189 region during the Asian session on Monday.
Bullish traders opt to lighten their positions amid extremely overbought conditions on the daily chart and ahead of the release of the latest US consumer inflation figures on Tuesday. The crucial US CPI report will influence market expectations about the Fed's rate-cut path, which, in turn, will drive the USD demand and provide a fresh impetus to the non-yielding yellow metal. In the meantime, bets that the Fed will begin easing its monetary policy soon keep the US Treasury bond yields depressed and should help limit any meaningful corrective decline for the XAU/USD.
11 March 2024, 06:52
•Gold price struggles to capitalize on last week’s blowout rally to a fresh record peak.
•Extremely overbought conditions cap gains for the metal amid a modest USD uptick.
•Bets for a Fed rate cut in June act as a headwind for the USD and should limit losses.
Gold price (XAU/USD) shot to a fresh record high on Friday after the US jobs report showed a spike in the unemployment rate and bolstered expectations that the Federal Reserve (Fed) will start cutting rates in June. The momentum, however, stalled ahead of the $2,200 round-figure mark amid a late US Dollar (USD) bounce from its lowest level since mid-January, which tends to undermine the USD-denominated commodity. The precious metal remains below the said handle and attracts some intraday sellers near the $2,189 region during the Asian session on Monday.
Bullish traders opt to lighten their positions amid extremely overbought conditions on the daily chart and ahead of the release of the latest US consumer inflation figures on Tuesday. The crucial US CPI report will influence market expectations about the Fed's rate-cut path, which, in turn, will drive the USD demand and provide a fresh impetus to the non-yielding yellow metal. In the meantime, bets that the Fed will begin easing its monetary policy soon keep the US Treasury bond yields depressed and should help limit any meaningful corrective decline for the XAU/USD.
Gold Price Forecast: Easing monetary policy will be crucial to push XAU/USD higher – ANZ
13 March 2024, 11:48
Higher than expected US inflation number weighed on Gold. Economists at ANZ Bank analyze the yellow metal’s outlook.
Market pricing for June cut to declined from 93% to 77%
Gold prices came under pressure after the US inflation print came in higher than expected. This led market pricing for a June cut to decline from 93% to 77%. The FOMC has said it needs more evidence to see inflation heading towards the 2% target before it starts cutting interest rates.
Easing monetary policy will be crucial to push Gold prices higher.
13 March 2024, 11:48
Higher than expected US inflation number weighed on Gold. Economists at ANZ Bank analyze the yellow metal’s outlook.
Market pricing for June cut to declined from 93% to 77%
Gold prices came under pressure after the US inflation print came in higher than expected. This led market pricing for a June cut to decline from 93% to 77%. The FOMC has said it needs more evidence to see inflation heading towards the 2% target before it starts cutting interest rates.
Easing monetary policy will be crucial to push Gold prices higher.
Gold price continues to oscillate inside Tuesday’s trading range between $2,154 and $2,180. The precious metal is slowly entering into a non-directional trend in which volatility gets sharply contracted. Earlier, the yellow metal dropped after printing a fresh all-time high near $2,195, which coincides with the 1.27% Fibonacci extension level (plotted from December 4 high near $2,145 to December 13 low at $1,973.3).
On the downside, December 4 high near $2,145 and December 28 high at $2,088 will act as major support levels.
On the downside, December 4 high near $2,145 and December 28 high at $2,088 will act as major support levels.
Gold price’s decline stopped exactly at 2166.30$ level, as it achieved bearish correction for the rise measured from 1984.16$ to 2222.86$, to rebound bullishly and hint heading to resume the main bullish trend, on its way to test 2222.86$ followed by 2239.00$ levels as next main stations.
Therefore, the bullish bias will be suggested for today, supported by stochastic gain to the positive momentum, noting that breaking 2166.30$ will stop the expected risen and push the price to achieve additional bearish correction that its next target reaches 2131.70$.
The expected trading range for today is between 2150.00$ support and 2200.00$ resistance.
Trend forecast: Bullish
Therefore, the bullish bias will be suggested for today, supported by stochastic gain to the positive momentum, noting that breaking 2166.30$ will stop the expected risen and push the price to achieve additional bearish correction that its next target reaches 2131.70$.
The expected trading range for today is between 2150.00$ support and 2200.00$ resistance.
Trend forecast: Bullish
Gold Price Analysis
Consolidation Around Key Level
Gold price settles around the 2190.00$ level after a recent rise.
The price has temporarily lost its positive momentum, pausing the bullish wave.
Resumption of Bullish Trend
Positive momentum is awaited to push the price to resume the rise.
Breaking 2166.50$ will halt the rise, leading to potential bearish correction targeting 2131.70$.
Trading Range
Expected trading range for today: 2175.00$ support - 2210.00$ resistance.
Consolidation Around Key Level
Gold price settles around the 2190.00$ level after a recent rise.
The price has temporarily lost its positive momentum, pausing the bullish wave.
Resumption of Bullish Trend
Positive momentum is awaited to push the price to resume the rise.
Breaking 2166.50$ will halt the rise, leading to potential bearish correction targeting 2131.70$.
Trading Range
Expected trading range for today: 2175.00$ support - 2210.00$ resistance.