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GOLD (XAUUSD) Weekly Forecast (12/02/2020 – 18/02/2020)

News and Data:

– February 05: USD ADP Non-Farm Employment Change 291K vs 157K expected
– February 05: USD ISM Non-Manufacturing PMI 55.5 vs 55.1 expected
– February 05: USD Crude Oil Inventories 3.4M vs 2.9M expected
– February 07: Average Hourly Earnings m/m 0.2% vs 0.3% expected
– February 07: USD Non-Farm Employment Change 225K vs 163K expected
– February 07: USD Unemployment Rate 3.6% vs 3.5% expected

Market Update:

The dollar has rallied for the 6th consecutive trading session, as gold prices moved higher on Monday. The world economy still affected With the Coronavirus spreading, investors are eyeing to dollar-denominated assets. US yields moved lower as riskier assets continued to gain traction. Gold prices generally come under pressure when the dollar rises, but the safe-haven status of gold has kept the metal afloat.

There were pretty much mixed feelings, and the markets were going sideways. The market was advancing following Friday’s Nonfarm Payrolls release, but then it has quickly reversed lower. However, we didn’t see that much of changes. And later in the day stocks were declining ahead of weekend’s pause and some China virus uncertainty:

With news updates from the World Health Organization (WHO) warning the spread of Coronavirus among people who had not been to China could be “the spark that becomes a bigger fire” and investor are closely monitoring the situation closely as reporting are still incoming out from the World Health Organization (WHO). However, gold is trading lower early Tuesday after yesterday rally drove the market to its highest level in a week. The precious metal is trading weaker despite doubts about how quickly China’s factories could get back to work given that the Coronavirus continues to spread and deaths mount.

It appears positive for gold prices on the news; however, gains will be limited as long as the U.S. Dollar remains firm, Treasury yields steady and demand for risk strong. In addition, traders are anticipating a hawkish tone from Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday, since he’s not likely to find any reason to alter the central bank’s current “wait and see” policy.

 

Technical Analysis:

Gold has made an important bullish step towards reversal as it recovered on the Hourly 4 chart. That makes Hourly 4 chart practically neutral but on the positive side supported above 1,550.70, which has held on multiple occasions. Hourly 4 is still neutral as said, but channel up has expanded giving me positive signs that gold should test 1,583.80 within 2 sessions. However, on the medium term, 1,562.70 dip is possible, but it is nothing more than small consolidation and yet again bullish outlook will prevail.