Gold Market Update

Gold prices are slightly lower in afternoon New York trading as some investors locked in gains at the end of the month. XAU/USD traded as low as $1265.69 an ounce but the U.S. dollar index weakened after the Chicago purchasing managers index came out softer than expected with a print of 58.9, and that did give gold a lift.

The key levels remain the same as the market is stuck within Friday’s trading range. So far, the resistance in the 1271/0 area has stopped the market from going higher, and down below we have the Ichimoku cloud on M30 chart acting as a support.  

The bottom of the cloud on M30 chart and the top of the daily cloud converge in the 1264.50-1264 zone so the bears will need to pull prices below 1264 to test the next support at 1261.

If the bulls win the fight and push the market beyond 1271, we might see a continuation targeting the next barrier in the 1282-1277.50 zone. A break through there would prolong the bullish momentum and clear the path towards 1288.

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Gold ends at 3-month high as dollar wobbles

Gold snapped a three-session losing streak Thursday to settle at a three-month high as the U.S. dollar lost ground to chief rivals the day after a fuzzier-than-expected interest-rate assessment from the Federal Reserve.

April gold GCJ7, +0.17% gained $18.10, or 1.5%, to settle at $1,251.40, its best settlement since Nov. 10, 2016, according to FactSet data. Some metals traders read the Fed minutes out Wednesday as casting doubt on the timing and pace of future rate increases.

In the notes from the Fed’s Jan. 31-Feb. 1 meeting, members indicated an interest in hiking rates “fairly soon,” but noted that the fiscal policy of President Donald Trump remained a wild card.

Earlier hints that the Fed would move to raise rates rapidly had led to a stronger dollar. That, in turn, usually provides a headwind to dollar-pegged assets including gold, making them less attractive to buyers using other monetary units.

Following the release of the minutes, the dollar, however, retreated and the WSJ Dollar Index, BUXX, +0.00% a measure of the U.S. dollar against 16 major currencies, fell 0.4% to 90.80 on Thursday. The ICE U.S. Dollar Index, DXY, +0.01% which gauges the buck against six rivals, edged down 0.1% to 101.10.

“The dollar weakness is one the primary reason that we are seeing this rally. Moreover, what traders are looking at is the probability of a rate hike in March and it is not great at all,” said Naeem Aslam, chief market analyst with Think Markets. “This sentiment is providing a lot of tailwind for gold.”

Gold held on to its morning gains and remained firm after a weekly report on jobless claims rising 6,000 to 244,000 in the week ended Feb. 18, near the 237,000 forecast by economists polled by MarketWatch and hanging around its lowest levels since the early 1970s.

The precious metal has also managed to break out of what Aslam referred to as an “ugly range” where it had been stuck for the past several days.

“Today traders just didn’t want to lose out or bet against a rising market,” said Jeffrey Nichols, senior economic adviser at Rosland Capital LLC.

The exchange-traded fund SPDR Gold Trust GLD, +0.87% advanced 1.1%. The iShares Silver ETF SLV, +0.76%  added 0.5%, while the VanEck Vectors Gold Miners GDX, +0.16% climbed 0.9%.

In other metals trading on Comex, May silver SIK7, +0.58%  rose 16 cents, or 0.9%, to settle at $18.18 an ounce. May copper HGK7, +0.77% fell 8 cents, or 3.2%, to settle at $2.66 a pound. June palladium PAM7, +0.37%  rose $4.40, or 0.6%, to settle at $774.60 an ounce. April platinum PLJ7, +0.56% climbed $9.20, or 0.9%, to settle at $1,011.90 an ounce.

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Forex - Dollar down in Asia on Iran tensions, Aussie gains on trade

The buck fell in Asia on Thursday with sentiment blended as tensions between Iran and the U.S. over a ballistic missile test this week through Tehran sparked geopolitical risk worries whereas the Aussie won on strong alternate knowledge.

U.S. nationwide safety Adviser Michael Flynn mentioned late Wednesday the White home has put Iran "on notice" over the missile check, raising concerns over steps that the U.S. may take. Later, Trump tweeted that Iran has usurped energy in neighboring Iraq.

"Iran is unexpectedly taking on an increasing number of of Iraq even after the U.S. has squandered three trillion greenbacks there. evident way back!"
The U.S. dollar index, which measures the greenback’s power against a alternate-weighted basket of six main currencies, eased 0.11% to ninety nine.fifty eight. USD/JPY modified arms at 113.05, down zero.17% and EUR/USD rose zero.09% to 1.0780.

AUD/USD jumped 0.72% to 0.7644.
In Australia, the AIG manufacturing index fell to 51.2 for January, nonetheless in enlargement however smartly under the earlier month stage of fifty five.4. The change balance for December came in at a surplus of 3.511 billion, wider than the two.20 billion surplus expected.

overnight, the buck made modest positive aspects on Wednesday as the Fed held consistent as expected, however signaled an upbeat view on the economic system and the chance of sticking to a forecast of as many as three fee hikes this yr.

The Federal Reserve held its fireplace on rates of interest as extensively expected on Wednesday, however was optimistic on the outlook for the financial system in preserving its benchmark overnight lending price target at 0.5% to zero.seventy five% following a 25 basis level hike in December.

“Measures of consumer and trade sentiment have improved of late,” the committee stated in its statement, using new language that jibes with voices on Wall boulevard following the election of Donald Trump as president.

“Job positive factors remained stable and the unemployment charge stayed close to its up to date low,” the statement said, reflecting only a minor tweak from language on the December assembly.

As neatly, payroll processing firm ADP mentioned non-farm personal employment rose by using 246,000 ultimate month, simply surpassing forecasts for an increase of one hundred sixty five,000. The Institute for provide management stated its index of manufacturing task rose to 56.0 last month from December’s studying of fifty four.5. That was once its perfect degree given that November 2014. Analysts had forecast a smaller elevate to 55.zero.

The dollar had tumbled on Tuesday, after Donald Trump’s top change adviser accused Germany of currency exploitation, announcing it is using a “grossly undervalued” euro to take advantage of the U.S. and its buying and selling partners. In separate remarks, President Trump criticized Japan and China, pronouncing they devalued their currencies to the disadvantage of the U.S.

The remarks indicated that the buck alternate price can have a prominent position to play in Trump's 'the usa First' agenda. the only forex showed little response to an earlier record showed that German manufacturing increase accelerated to its quickest p.c. in three years in January.

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