Tempting recovery in the gold market as dollar slips in the global market
In the last week, the price of gold went up after hitting the critical support level on the daily chart. The gain was further strengthened after the U.S dollar slipped from the 14 years highs in the market. During the European session on Monday, the price of gold showed nice bullish momentum in the market as the market opened with a weaker dollar. The sudden fall of strength in the U.S dollar caused the CFDs market to go up in the global economy. According to the contract of February on the Comex division the gold traded at $1,141.95 a troy on the New York Mercantile Exchange. This ultimately added a gain of 0.67% in the market resulting in a $7.6 rise in the trading session. However, the price of gold significantly went down in the global market after the FED hike their interest rate in their FOMC meeting minutes. The price of gold is measured in dollar and such an important economic event from the FED definitely creates extreme volatility in the precious metal market. With the strengthening of the U.S dollar, the price of gold went down at $1,124.30 on the last Thursday. However, things went in favor of the gold price as the price of the dollar went down on the last Friday. There was a sharp decline in the value of dollar index which measures the value of the dollar against a trade-weighted basket of six major currency pair. The fall was nearly about 0.3% on the market. The dollar market slipped from the 14 years highs which are at 103.55 and it went down to 102.6 level. Such a sharp fall from the peak level pushed the buyer back in the gold market before the Christmas holiday. However, the professional traders are expecting less volatility in the gold market in this upcoming week since most of the traders are staying on the sideline due to the Christmas holiday and year ending. Most of them have closed their open position and waiting patiently for the New Year trading session for trading.
The price of gold is measured in dollar and with the variation strength in the U.S dollar, the price of gold heavily fluctuates in the global world. In general, a weaker dollar result in the higher price of gold since the yellow matter is priced in dollar. Previously the gold market was not giving any clear indication to the trader since the FED had not declared their interest rate decision in the market. But in the last FOMC meeting minutes, the FED have raised their interest rate with basis point in the market. Such a well-anticipated rate hike created extreme volatility in CFDs market. In the last week, the gold secures a six consecutive free fall in the market. This free fall in the price of gold resulted in 2.1% loss in the price of gold. To be precise the gold futures lost near about $24.10 in the last week. But the US dollar needs another three rate hikes in the next year in order to retain its current strength in the market. But three consecutive rate hike in a single year will be extremely difficult for the FED since the economic performance needs to be extremely well in every single sector. A weak data from a single sector will push the FED away from the rate hike in the next years since it will create an imbalance in the global economy. Moreover, the central bank will also be pushing the FED for at least two rate hike before the month of September 2017.The price silver also dropped by 5.2 cents in the market due to the intensive strength of the U.S dollar. Currently, the price of silver is leading towards the 6 months low in the market and trying to hit $15.92 in the market. The price of copper also went down by 0.88% percent in the market which results at the base price of $2.542 a pound.
There has been a massive fall in the price of gold for the last six consecutive week. Due to immense strength of the U.S dollar the CFDs market has also exhibited intensive move during the FED rate hike decision. However, in the eyes of trained professional, the market has now absorbed the strength of the rate hike to great extent. Professional gold investors are cautiously waiting for the bullish reversal signal in the price of gold. Currently, the price of gold is trading near the critical support level and most of the investors are optimistic about the price of gold and thinking that it will grow higher in the near term future. Professional traders are now cautiously waiting for bullish reversal signal in the gold price to enter long in the market. Most of the expert gold investors are now waiting for a weak fundamental news release in the market since it will allow them to buy the gold in a sweet spot. In the next year, the dollar is most likely to face trouble to move with such strength in the market. To be precise the overall market sentiment is extremely bullish for this precious metal at the current moment and most of the professional traders are cautiously waiting for negative economic news release in the U.S section. But this has very little to with the price of gold since most of the banks and leading investors will be enjoying the charismas holiday and start their trading with a clear view in the next year.