Markets have been very interesting as of late, and one the most interesting movers in the market thus far has been gold. Normally the hedge of risk it once again taken a major role in the Trump world after recent events and failures. After the election of Trump there was a sharp sell-off in the market from gold buyers as many thought Trumps economics would bring about growth and prosperity to the market, the reality has been so far a little different. Right now gold is still indeed acting as a risk hedge and markets are keen to keep it above 1200 – something that many, like myself would not happen again for some time. The economy is creating jobs, but the expectations to create more wealth and growth are weighing on the market as it gets ever impatient. If another US bill was to fail then it would cause a rush back to the precious metal. Non-farm payroll today will also have a large impact and a positive reading could lead to some selling, but expectations are not high for a strong reading.
Gold has trended the charts quite nicely over the past few months and the recent rise has shown some slight ranging as the market waits to see the next move. Resistance at 1263 has so far been the line in the sand the market is reluctant to cross, however the 20 day moving average which is coming up the chart has been acting as short term support and is likely to add some pressure. If we see another bounce here of 1263 the market could treat it like a double top and move lower. Support levels below can be found at 1241 and 1227 and are likely to be hard targets for gold sellers. Any movement past 1227 would be a strong bearish signal in the mid to long term for traders.
With all the risk aversion in the market the commodity currencies have been hit hard with the NZDUSD sliding down the chart. This is in part to recent events in NZ regarding flood damage, but also the fact that the economy has been slightly sluggish and showing the off sign of slowing down. Global US fears have also helped push traders into safe havens and away from the fixed trades of the NZDUSD which has been a staple for some time.
The NZDUSD has so far been sliding downwards in a bearish channel and could continue to do so if the market is risk averse. Support levels are quite tight once you push just through the 70 cent barrier and can be found at 0.6948 and 0.6919 at this stage. If there is further pressure these levels could break, but if we see some positive global sentiment a jump higher would test resistance around 0.7019 and 0.7076.