Gold Rallies Into End-of-Week Data
Today’s Spotlight Market
Gold futures closed higher for the third consecutive session, as traders await a slew of economic data to finish the week.? Today?s retail sales and claims data, along with tomorrow?s PPI and Michigan Sentiment are of particular interest to traders.? In addition to the economic data to cap off this trading week, traders will be anxiously awaiting next week?s FOMC rate decision.? The Fed is not expected to change interest rates, but traders will attempt to sift through the language of the central bank?s policy statement to gauge when the Fed will raise rates.? In theory, the sooner the rate hike, the more bearish the statement may be for the Gold market.
Fundamentals
One of the main drivers of Gold prices this week has been the weakness in the US Dollar Index, which has started off the month on a sour note.? The weakness in the greenback to start the week is somewhat counterintuitive, given the strong non-farm payroll data last week.? Physical Gold buying has seen an improvement this year, largely driven by Indian jewelry demand, which is up 22% in the first quarter.? German safe haven investment demand was up 20% in the first quarter of this year, which is not at all surprising given German public opinion over the Greek bailouts.? Traders are cautiously optimistic that demand for Gold will continue to rise in China, India and Russia, but they are not holding their breath hoping for the same growth as India had seen in Q1. ?
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the August Gold contract breaking through near-term support near the 1175 level last week, only to rise back above the level on Tuesday.? Prices may continue to trade in a channel between 1175 and 1225 in the near-term.? The RSI indicator has recovered from oversold levels and sits in the lower portion of neutral territory.
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