3 Apr 2015
Gold: a buy on dips opportunity for $1225 - FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, explains that the rate hike scenario was being sold as positive, with a weak NFP rate hike could be delayed beyond September leading to a fall in equities, and make Gold and safe haven assets attractive.
Key Quotes
“Weak equities could trigger a rise in safe haven demand.”
“.. a significantly weak NFP print could push the rate hike bets further out in late 2015 or early 2016.”
“Moreover, the Fed policymakers, US Treasury secretary and other major central bankers across the globe in the past six months or so have repeatedly sold an interest rate hike as appositive development for the US and the global economy. Consequently, the equity markets in the US have rallied even on talks of a rate hike.”
“The equity markets in the US and Europe could fall, leading to strength in Gold and other safe haven assets like Yen.”
“Post the NFP number, markets are likely to turn their attention to Q1 US GDP initial estimate. It is widely expected that Q1 GDP is likely to significantly weak or even negative.”
“Thus, the downside in the Gold appears capped around USD 1160/Oz.”
“Currently trades above 1198.9, which is 61.8% Fib retracement of 1131.9 (Nov. 7 low) to 1307.3 (Jan. 22 high).”
“The inverted head and shoulder neckline at 1220, almost coincides with 50% Fib retracement at USD 1219.6. We also see USD 1225.1 (505 Fib retracement of 1307.3-1142.6). Thus, USD 1220-1225 is likely to act as strong resistance.**”
“On the other hand, 76.4% Fib at 1173.2 is likely to act as strong support”
“Immediate Upside appears capped at USD 1225/Oz,above which USD 1250/Oz is possible”
“Metal likely to be bought on dips”
Key Quotes
“Weak equities could trigger a rise in safe haven demand.”
“.. a significantly weak NFP print could push the rate hike bets further out in late 2015 or early 2016.”
“Moreover, the Fed policymakers, US Treasury secretary and other major central bankers across the globe in the past six months or so have repeatedly sold an interest rate hike as appositive development for the US and the global economy. Consequently, the equity markets in the US have rallied even on talks of a rate hike.”
“The equity markets in the US and Europe could fall, leading to strength in Gold and other safe haven assets like Yen.”
“Post the NFP number, markets are likely to turn their attention to Q1 US GDP initial estimate. It is widely expected that Q1 GDP is likely to significantly weak or even negative.”
“Thus, the downside in the Gold appears capped around USD 1160/Oz.”
“Currently trades above 1198.9, which is 61.8% Fib retracement of 1131.9 (Nov. 7 low) to 1307.3 (Jan. 22 high).”
“The inverted head and shoulder neckline at 1220, almost coincides with 50% Fib retracement at USD 1219.6. We also see USD 1225.1 (505 Fib retracement of 1307.3-1142.6). Thus, USD 1220-1225 is likely to act as strong resistance.**”
“On the other hand, 76.4% Fib at 1173.2 is likely to act as strong support”
“Immediate Upside appears capped at USD 1225/Oz,above which USD 1250/Oz is possible”
“Metal likely to be bought on dips”