Strong USD and Hong Kong Unrest Pushes Gold Lower

Strong USD and Hong Kong Unrest Pushes Gold Lower

By: Ben Myers | YesOption | On:30-09-2014 04:39
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chart for Gold

Daily chart for Gold

Gold

Gold prices were lower in early morning trade in Asia on back of the unrest in Hong Kong. Traders and investors are closely watching out for manufacturing data coming out of China to understand the underlying strength of the worlds’ second largest economy. Gold prices could not sustain at higher levels in trade last night as the dollar recovered from the early morning weakness.

The National Association of realtors reported that the pending home sales data dipped by 1 percent showing sluggish growth in the real estate market. The commerce department reported that personal spending rose by 0.5 percent which was seen as a huge positive and bolstered dollar demand. Traders and investors would be closely watching two major events in the latter half of the week.

On Thursday, the European Central bank would be meeting to discuss the future course of action with regards to the stagnating growth in the Eurozone. The second would be the nonfarm payroll data which would provide an indication about the underlying strength in the US economy and also provide an insight into the next steps to be taken by the Federal Reserve with regards to the short term interest rates.

On the daily charts for gold, the precious metal continues to be in a downtrend forming lower highs and lower lows. In the session yesterday, gold prices could not sustain at higher levels on the back of renewed dollar demands. The momentum indicator for gold continues to remain in the bearish territory showing no signs of a reversal which shows that bears have the upper hand. The relative strength index is also showing no signs of inherent strength which is a cause of concern.

Actionable Insight:

Short Gold if it falls below $1205 with a short term target at $1180

Long Gold if it moves above $1221 with a short term target at $1242

 

Ben Myers

Ben Myers

Success = few pips, thousand times

Ben Myers is one of the most respected and trusted names in the financial trading industry. Following a long and successful career with HSBC, Bank of Ireland and running his own investment firm

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