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Saturday, October 16, 2021

Gold Prices in Euros Hit All-Time Highs


Gold prices broke out, and continue to rise as yields. The rally in gold comes despite a surge in the USS to fresh multi-year highs.

.DXY nearly hit 100 for the 1st time since March of Y 2017. The 10-yr US yield is trading near the low end of its 5-yr range and set to break down.

Gold prices have been negatively correlated to US yields and a breakdown would be a confirmation of a further rally in the precious Yellow metal.

Gold has historically been negatively correlated to the Buck. During the past month, this relationship has broken down. While gold in USD terms has hit a 7-yr high, gold’s value in terms of the EUR has hit an all-time highs

Technical Analysis: Gold prices broke out closing at a new 7-yr high and poised to continue to climb. Prices tested resistance near 1,625 and again closed above 1,610. Support for the precious Yellow metal is seen near the 10-Day MA at 1,579.

Momentum has turned positive as the MACD index generated a crossover buy signal. This occurs as the MACD line crosses above the MACD signal line. The MACD histogram crossed above the Zero-index mark, which is also a buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Both the RSI and the Fast Stochastic are accelerating higher pointing to accelerating positive momentum. The current reading on the Fast Stochastic is 87, above the overbought trigger level of 80 which may foreshadow a pull back.

Gold futures settled 8.70 higher (+0.5%) at 1,620.50 oz, the .DXY held gains of about 0.1% at 99.83.

The FOMC Meeting Mins Express Confidence

The Fed policymakers believe that interest rates likely would remain unchanged for a while. The central bank’s policy making group voted to leave its benchmark overnight funds rate in a range between 1.5% and 1.75%. In coming to that decision, FOMC members noted that the outlook for the economy had gotten stronger since the prior forecast in December.

Have a terrific weekend

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