Gold Explodes To 5-Year High Post-FOMC
Matt Simpson June 20, 2019 7:39 AM
During a busy session for Asia and no less than three dovish central banks, gold exploded to a 5-year high and stopped just shy of $1400. With an increasingly bullish trend structure on the monthly charts, we remain bullish after prices have had a chance to pause for breath.
Following today’s FOMC meeting gold prices exploded and stopped just shy of $1400, as the world digested the increasing ‘easiness’ of central banks policies.
The Fed had confirmed their dovish stance nearer the end of the US session, with nearly half of the voting FOMC members expecting two cuts this year. Shortly after, RBA’s Philip Lowe hit the wires to hammer home their dovish views and all but confirm another cut is on the horizon. And, let’s not forget that RBA teased the notion of QE in their June minutes, adding that “Lower interest rates were not the only policy option available to assist in lowering the rate of unemployment”. Not wanting to miss out, BOJ reiterated their ultra-easy policy and expect to keep ‘extremely low rates at least through spring 2020’. Given the backdrop of trade wars and deteriorating economic data, the pressure if building for BOJ to stimulate the economy further. And, of course this is all after Draghi shot down the Euro with potential for ECB to ease further, earlier this week.
With an increasingly bullish trend structure on the monthly charts, we remain bullish after prices have had a chance to pause for breath.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.