Gold’s step back before breaking $2000

Alexander Kuptsikevich FxPro

Gold stormed $2000 twice last week, but both attempts failed to consolidate above this significant round level. The double correction since the previous week clears the way to the upside but does not signal that gold is in trouble.

The momentum of gold's rally from the lows of the 8th pushed it up by over $200 at its peak, creating a short-term overbought situation. Last week, the brief touch below $1940 was too quick and impulsive to pave the way for upward movement.

The problems in the US and Europe caused gold and silver rallies as investors tried to park their capital quickly for fear of leaving their money in the banks. Such momentum is unlikely to be the basis for growth in the medium to long term, but changes in monetary policy could.

Last week, the Fed raised interest rates with one hand while handing out liquidity to banks with the other. These are incompatible policy moves, and now the balance of power is such that the Fed would prefer to stop raising rates so that it does not have to act repeatedly as a lender of last resort.

We saw a similar shift in Fed monetary policy in the past at the end of 2018, when the two-year gold rally began. The subsequent two-year sideways rally and pullback to $1600 have made gold attractive again for long-term buyers as a slowdown in the pace of Fed rate hikes looms on the horizon.

A change in the central bank's rhetoric promises a fresh impetus for buying. At the last meeting, the FOMC raised rates, but Powell said in a press conference that banking problems were cooling the economy as much as policy tightening. Although we have not received formal confirmation, this has cleared the way for a rate change.

Gold's long-term upside potential is close to $2640, representing 161.8% of the rally from the 2018 lows. Such an ambitious rally requires an impressive run-up, and we are likely witnessing one right now.

Of course, as always in such circumstances, we must be careful that the correction does not turn into a new downward spiral. Such a signal level could now be in the $1930 area. A break below $1900 could be the last nail in gold's bullish outlook, but it is an alternative scenario - not the main one.

Author

Alexander Kuptsikevich

FxPro

Alexander Kuptsikevich, a senior market analyst at FxPro, has been with the company since its foundation. From time to time, he gives commentaries on radio and television. He publishes in major economic and socio-political media.

GBP/USD bulls seem hesitant as Hormuz ship attack supports safe-haven USD

The GBP/USD pair sticks to a positive bias for the second straight day, albeit it remains below the previous day's swing high and trades just below the 1.3200 mark during the Asian session on Friday. Furthermore, the fundamental backdrop warrants caution before positioning for any meaningful recovery from November 2025 lows, around the 1.3140 region, touched on Wednesday.

EUR/USD softens toward 13‑month low near 1.1350 as rising US PCE inflation lifts US Dollar

The EUR/USD pair loses ground to around 1.1365 during the early Asian trading hours on Friday. The major remains near a 13-month low as market expectations for US interest rate hikes have risen. Traders brace for the release of the Michigan Consumer Sentiment Index report, which will be released later on Friday.

Gold returns to the red near $4,000 as Hormuz risks revive USD demand

Gold drops back to near $4,000 in Asia on Friday as geopolitical risks stemming from an attack on a cargo vessel in the Strait of Hormuz bolster the US Dollar. The commodity remains on track to record losses for the fourth consecutive week.

Bitcoin briefly hits $58K as short-term holder weakness deepens, macro conditions trigger liquidations

Bitcoin fell briefly toward the $58,000 level on Thursday as mounting macroeconomic uncertainty, weakening short-term investor conviction and widespread liquidations intensified selling pressure across crypto.

Micron prints perfect, and now the chart has to answer

Memory’s biggest name just delivered the cleanest quarter of its life, and the most interesting thing about it is that the stock isn’t sure what to do with it. Micron closed out fiscal Q3 with revenue of $41.5 billion, up 346% on the year, a fifth straight record. Gross margin came in at 84.9%, up from 39% the same quarter a year ago. Earnings landed at $25.11 against a Street sitting near $20.49.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.