- Gold taking on the bears through recent resistance structure.
- The yellow metal is bid regardless of cautiously optimistic market tones.
- A key week ahead sees OPEC meeting, Fed and ECB minutes and Europgrop bailout discussions.
cDespite a bid in the stock markets and a sense of hope pertaining to less pessimistic weekend COVID-19 headlines, the price of gold is on the rise, adding over 2% at the start of the week, piecing a significant resistance along the way. At the time of writing, gold is trading at $1,654.30 between a range of $1.609.11 and $1,657.30 and at the highest levels since 26th March's top of $1,645.50.
Markets have started out in the week with an optimistic tone as virus cases are starting to slow according to weekend updates; more on those here: COVID-19 Updates: A crucial week ahead for the debacle. However, the market will continue to watch the rate of the spread of COVID-19 for direction and while the price action is obscure, gold will remain a bid so long as the stimulus keeps coming and uncertainty plays on within the COVID-19 debacle.
"We think the set-up for a multi-year bull market is being cemented as the market is awash with both monetary and fiscal stimulus while rates are at the zero bound, which suggests investors will continue to seek gold's warm embrace as real global rates become entrenched in negative territory,"
analysts at TD Securities argued.
Meanwhile, there are big questions over the banking sector in Europe and the US for that matter when considering Deutsche Bank's inherently toxic balance sheet and poisonous tentacles within the global banking sector.
While it could be argued that the banks came into the coronavirus pandemic much stronger than they went into the global financial crisis, it is whether their capital and liquidity buffers will be sufficient in a pandemic of bad corporate loans in the most dramatic economic crash in history is where markets should be focussed.
This is a matter which could prove to be the next catalyst for a major turn of events in financial markets which would trigger the next round of safe-haven flows to potentially rocket gold higher within what appears to be the making of a multi-year bull market being cemented.
Key week ahead
As for the week ahead, there will be an immediate focus on Tuesday's Eurogroup meeting as well as Thursday's OPEC meeting, and the latest sets of Fed & ECB Minutes. Here are the key points to these events
- Euro-area finance ministers meet to discuss concrete proposals for a euro-area bailout program.
- CNBC quoted the head of Russia’s sovereign wealth fund Kiril Dmitriev as saying that Russia and Saudi Arabia were “very, very close to a deal”.
- The minutes will cover the unscheduled meetings resulting in rate cuts on March 3 and March 15 (150 bps in total) as well as any other FOMC-wide discussions through March 15. "The tone should portray a Fed ready to use all tools to alleviate stress in markets and to limit the severity of the recession. Open-ended QE and several 13(3) programs were announced after March 15," analysts at TD Securities explained.
Gold levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.