Gold is Facing Critical as USD Rebounds
By: Eddy Peng Mar 29, 2017
Chart 1: XAUUSD Daily
U.S. Dollar Index grew to 99.53 yesterday for potential reverting, erasing the loss on Monday as the consumer confidence in March released today jumped to the highest level in more than 16 years, with Americans grew increasingly upbeat about both present and future conditions. Optimism for faster economic growth since the election of President Donald Trump, along with rising stock markets and steady labor-market gains, have helped push consumer sentiment to fresh highs. At the same time, confidence may be at risk of fading in the coming months that Trump administration’s following agenda is still clouding after last week’s failure of health-care legislation backed by the president and Republican leaders. U.S. Advance Good Trade Balance of February released yesterday also reveals good outcomes of Trump’s exertion in reversing situation of benefiting other countries in trading with a slogan “America First”. The good trade deficit was 64.8 billion U.S. dollar, 4 billion dollar lower than that in January. The decreasing trading deficit reflects export’s rise, possibly leading to currency growth in the future. However, Federal Reserve Chair Janet Yellen said challenges remain in the U.S. labor market, including concentrations of elevated joblessness in poor and minority communities, as she pushed for better education and training so the economy works for all Americans. “While the economy overall is recovering and the job market has improved substantially since the recession, pockets of persistently high unemployment, as well as other challenges, remain,” she said in the text of a speech Tuesday in Washington. U.S. central bankers are gradually removing monetary stimulus as inflation moves back up to their 2 percent target, which is leading to investors’ gold chasing for purpose of value maintenance. In this case, gold price will be likely to grow afterwards. U.S. Index is currently supported by MA(200). If it continues to increase to approach MA(60), further rise for breakout is questioned. With narrowing of MA(200) and MA(60), gold price may start to slip again if MA(60) breaks MA(200) downward.
Chart 2: USDIndex Daily
