Gold surges to month high as USD weakness continues

November 17, 2014

The Sterling fell to a 14-month low on Friday as market participants have now delayed their expectations of the BOE’s first interest rate hike to October 2015 after the dovish statement. Although the UK is still the best performing economy in advanced nations, the recent data shows the growth may have lost some momentum.

The Euro/Pound also rose to a near one-month high after its three consecutive days of rallying. If the price breaks the line of highs of September and October, then the Euro/Pound may surge back to its year high of 0.84.

The Aussie again rebounded to the 0.8760 level under the background of the weakening US Dollar. However, the AUD/USD still cannot stand beyond this resistance. Local traders need to pay attention. If the pair breaks through this level, then it will head to 0.89.

The rocketing gold price on Friday was a bit of a surprise to the market. It rose by 2.1% to $1188 per ounce. Some technical buying orders supported the price from $1147, and triggered the buy stop orders when it passed through $1168. However, the current level is the 50% retracement of last round of decline since mid-October. The fundamental aspect, like US tepid economic recovery and declining appetites from China and India, still suppresses the gold price in the long term.

The Asian stock markets had mixed closes. The Nikkei Stock Average gained 0.56% to 17491. The Shanghai Composite retreated by 0.27% to 2479. The ASX 200 closed flat at 5454. In the European stock markets, the UK FTSE was up 0.29%, the German DAX rose 0.05% and the French CAC Index gained 0.35%. The US market saw benchmarks rise for the fourth week. The S&P 500 closed flat at 2040. The Dow slid 0.1% to 17635, while the Nasdaq Composite Index rose by 0.18% to 4688.

On the data front, Japan’s Prelim GDP will be released at 10:50 AEDST and Australia’s New Motor Vehicle Sale will be at 11:30 AEDST. German Buba Monthly Report will be at 22:00 AEDST and US Empire State Manufacturing Index will be at 0:30. Investors will also focus on ECB President Draghi Speech later to find out more signs of ECB’s next move.

Have a great trading day!

Anthony


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