Gold is rising firmly this morning following last week's bullish breakout from the dominant descending price channel, trading around $4,130 as a softer US Dollar and easing concerns over energy-driven inflation support the precious metal. The advance extends the recovery above the $4,000 round number highlighted last Thursday. Bulls will now be watching whether the price can sustain its gains towards the previously identified $4,200 resistance area.
Asian stock markets are recovering a bit after last week’s volatile trading. Japanese equities have led the early gains, while US equity futures have also moved higher. However, there is nothing special or impulsive about these movements higher, with the rebound looking subdued. The bearish environment in stocks might continue.
The US Dollar is retreating this morning rather than extending Friday’s payrolls-driven advance. Several Asian currencies have recovered some ground, while the softer greenback is helping Gold. Friday’s employment report remains important to the interest-rate outlook, but it is not producing continued Dollar buying in the current session.
Crude Oil remains volatile as markets weigh prospects for a negotiated end to the Iran conflict. Prices initially fell after President Trump said fresh US attacks were highly unlikely while negotiations continued to make progress. Brent traded below $98 and WTI near $90 in early Asian trading. The reduction in the war premium remains substantial, but a diplomatic settlement has not yet been secured.
Friday’s US employment report was considerably stronger than expected. Non-Farm Payrolls increased by 165,000 in October, against a Reuters consensus forecast of 65,000, while the unemployment rate fell to 4.1%. The figures strengthened expectations of a December Federal Reserve rate hike.
Bitcoin is failing to participate in the recovery seen in Gold. It has fallen below $75,000, reversing last week’s attempt to establish support above $80,000. Concerns about tighter cryptocurrency regulation under a Democratic-controlled Congress remain a headwind. The immediate technical picture has therefore deteriorated, with $80,000 once again an overhead recovery level rather than established support.
Forex Today: Gold Rallies Above $4,100 as Asian Stocks Recover
Chief Analyst and Director of ContentAdam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked with...
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Chief Analyst and Director of ContentAdam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
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