• Gold rose to a 7-week high on Thursday on a weaker dollar after US President-elect Donald Trump provided little clarity on future fiscal policies at a press briefing.
• SPOT GOLD UP 0.7 PERCENT TO $1,200.08/OZ AT 0732 GMT, BEST SINCE NOV. 23
• “There is some kind of uncertainty in Trump’s policies and the dollar’s upside is also being questioned by the markets,” Argonaut Securities analyst Helen Lau said.
• “We need more positive development in US economic fundamentals before the dollar can go higher,” Lau said, adding that the markets were disappointed in Trump’s speech
• “The dollar will roll back a good proportion of its gains over the course of the month in January and gold should benefit as a result if Trump team hits the ground running and continues to give more impressions of disarray than what has been apparent so far,” INTLFC Stone analyst Edward Meir said in a note.
• The outlook for US rates may become a little clearer when Federal Reserve Chair Janet Yellen appears at a webcast town hall meeting with educators on Thursday.
• A host of Federal Reserve presidents including Philadelphia, Chicago, Atlanta, Dallas and St. Louis will also speak on a range of issues.
• Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding the non-yielding asset while boosting the dollar, in which it is priced.
• Gold Technical Strategy: Intermediate-term (past 3 months) still bearish, short-term (past month) bullish.
• we had looked at levels at $1,188 and $1,200 and today, we’re going to add in a 3rd level for traders to watch at $1,204.76, which is the 38.2% retracement of the ‘post-Election’ move in Gold prices. These three prices can each act as resistance to collectively produce a ‘resistance zone’ in which traders can look for a near-term top to form in the effort of trading the bigger picture trend-lower. If price action in Gold breaks above $1,205, traders will likely want to re-evaluate the bearish trend and move-forward with a more-bullish bias.
Reference: Reuters,Daily FX
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