Gold & Rate Hike Update
Gold traders must keep an eye on bond market expectations for interest rate hikes. Yes rate hikes. The graphs below show rate hike probabilities for July (while) and September (green), with the latter currently 68% probability for a 25-bp rate hike. See how gold fell and DXY rose when the probability graphs rose. The weaker than expected US jobs report on Thursday triggered a temporary rally in gold and decline in rate hike probabilities, but markets are now repricing probabilities. DXY remains above the 100-week MA, while gold is unable to regain the 55-week MA.
Will gold prices do something they never did before? Friday will be key. Watch now.
Read More...This chart of the USDX index shows an important breakout is afoot. If this breakout proves valid and continues ahead, it may present some challenges for XAUUSD by means of key resistance near 4240/45. Any decline below 4165/70 is likely to find subsequent support around 4115/20. Nonetheless, the DXY chart below may not only suggest selling pressure will re-emerge --likely near 4240, but could re-intensify selling towards a break of 4100. Im such intermarket tehnical dynamics, such bullishness in DXY could mean repeated failed buying for XAUUSD, rather than outright violent sell-offs in the yellow metal.
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