{"id":144175,"date":"2019-03-22T11:30:37","date_gmt":"2019-03-22T15:30:37","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=144175"},"modified":"2019-03-22T11:30:37","modified_gmt":"2019-03-22T15:30:37","slug":"gold-gains-limited-as-usd-recovers-strongly-post-fomc","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/03\/gold-gains-limited-as-usd-recovers-strongly-post-fomc\/","title":{"rendered":"Gold Gains Limited As USD Recovers Strongly Post-FOMC"},"content":{"rendered":"
March 22, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Gold: USD Recovery Caps Gains<\/strong><\/h2>\n

The yellow metal posted a\u00a0third consecutive positive week.\u00a0<\/strong>Gold prices took advantage of\u00a0the initial USD weakness<\/strong>\u00a0in response to the latest FOMC meeting. The\u00a0Fed kept rates on hold<\/strong><\/a>\u00a0as expected. The bank noted that growth was lower than expected over the first part of the year, despite solid labor market conditions and subdued inflation. Looking ahead, the Fed reaffirmed its commitment to keeping rates on hold saying it would be maintaining a\u00a0\u201cwait and see\u201d approach<\/strong>\u00a0to incoming data as well as highlighting the need for keeping an eye on global developments.<\/p>\n

USD was quickly shunted lower as the market reacted to the decision and statement, allowing gold to trade further higher. However, a\u00a0sharp USD recovery<\/strong>\u00a0over Friday and Thursday has\u00a0capped gold upside<\/strong>for now. The BOJ and ECB monetary policy is still at cycle lows. And the Bank of England confirmed that it will also be keeping rates on hold amidst ongoing Brexit uncertainty. As such, it seems that rate differentials still favor USD.<\/p>\n

News of the EU offering the UK\u00a0a conditional delay to Article 50<\/strong>\u00a0has also helped shore up risk appetite into the end of the week. There was some nervousness among investors regarding the Boeing investigation and Google fine. So, the market has definitely welcomed the news that the UK might remain in the EU for a further two months beyond the original March 29th<\/sup>\u00a0deadline. This again\u00a0capped gold upside here<\/strong>.<\/p>\n

\"forex<\/a><\/p>\n

Gold has run into some interesting levels over recent trading. After piercing the 1316.96 level, gold prices sharply reversed lower. It traded back down below 1309.12 support to test the 1303.11 level before recovering back to the former level. Still trading within the bullish channel which has framed price action since the March lows, if price can stay above 1309.12, the focus is on a further push higher. The structural zone between 1322.98 and 1326.12 is the next focus point for bulls. Bears will need to see a break of the rising channel base and structural support around 1303.11 to gain a conviction in further downside.<\/p>\n

Silver: Gold-Silver Ratio At Historic Lows Points To Upside Risk<\/strong><\/h2>\n

Silver prices have broadly tracked the moves we\u2019ve seen in gold this week. The metal\u00a0traded higher initially<\/strong>\u00a0on a weaker USD, before\u00a0retracing some of these gains\u00a0<\/strong>on the greenback\u2019s sudden recovery. Prices are still fighting to recover from the sharp sell-off in February. However, many investment banks are still forecasting higher prices.<\/p>

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Many players have long been projecting higher levels linked to\u00a0expectations of increased demand from the auto sector.\u00a0<\/strong>Nevertheless, many are now also pointing to the\u00a0historic lows in the gold-silver ratio<\/strong>. If we see a mean-reversion in this ratio, which is at its lowest levels since the 90s, this would quickly drag silver prices higher. The most likely candidate to cause and support this shift is a\u00a0further slowing of the US economy<\/a>.\u00a0<\/strong>That, as well as the further reduced Fed rate hike expectations.<\/p>\n

\"xagusd\"<\/a><\/p>\n

After breaking above the mid-February lows to trade highs of 15.6351, silver prices have fallen back below 15.5359. This is now holding as resistance. Price needs to get back above this level to keep bias on further upside, in line with the bullish channel which has framed price action since the March lows. Bulls will be targeting a run up to the next structural level around 15.7342 next.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Gold: USD Recovery Caps Gains The yellow metal posted a\u00a0third consecutive positive week.\u00a0Gold prices took advantage of\u00a0the initial USD weakness\u00a0in response to the latest FOMC meeting. The\u00a0Fed kept rates on hold\u00a0as expected. The bank noted that growth was lower than expected over the first part of the year, despite solid labor market conditions […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-144175","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=144175"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144175\/revisions"}],"predecessor-version":[{"id":144188,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144175\/revisions\/144188"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=144175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=144175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=144175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}