Gold turns higher as US stocks stage brief drop

Fawad Razaqzada TradingCandles.com

The brief but sharp drop in equity markets caused safe-haven gold to bounce back this afternoon. Stocks dropped after Donald Trump’s oldest son released an email chain showing him discussing plans to hear damaging information on Hillary Clinton from the Russian government. Markets are worried that this may have influenced last year’s US presidential elections, and could put question marks over Trump’s presidency. If stocks start a meltdown now, then gold could back strongly.

The precious metal is finding additional support from a weaker dollar. The EUR/USD has broken above 1.14 resistance while the USD/JPY has started to ease back following its recent rally. The dollar is holding its own well against other currencies however, including GBP, NZD and CHF. But the euro and yen strength have caused the Dollar Index to turn lower.

The precious metal actually formed a doji candle right at $1207.50 support level yesterday. This level was the last resistance prior to the breakout in mid-March. If gold manages to rise and hold above the key short-term resistance area at $1215/18 then we could see the unwinding of the short positions and thus a short-squeeze rally. However if support at $1207.5 gives way on a daily closing basis then this would invalidate the bullish view.

Author

Fawad Razaqzada

TradingCandles.com

Experience Fawad is an experienced analyst and economist having been involved in the financial markets since 2010 working for leading global FX, CFD and Spread Betting brokerages, most recently at FOREX.com and City Index.

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold surges past $4,000 as USD falls in reaction to US midterm election results

Gold catches aggressive bids on Wednesday, surging past the $4,000 psychological mark heading into the European session as the US midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, softer US bond yields counter Fed hike bets and contribute to driving flows to the non-yielding bullion.

Bitcoin tests critical support, Ethereum struggles below resistance, XRP extends losses

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) remain under pressure on Wednesday as bearish momentum continues to weigh on prices. BTC approaches key support around $76,466, and a decisive close below could open the door to deeper losses. Meanwhile, ETH struggles below key resistance while XRP faces rejection at the upper trendline of a falling channel pattern, all hinting at deeper losses.

US Dollar Index dives to late September lows near 101.25 on US election results

The US Dollar Index, which tracks the Greenback against a basket of currencies, comes under intense selling pressure during the Asian session on Wednesday, dropping to its lowest level since late September as early US midterm election results heightened political uncertainty.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.