By Admiral Markets

Source: Economic Events May 20, 2020 – Admiral Markets’ Forex Calendar

Gold bulls made a clear statement at the start of the week by pushing the precious metal to new yearly highs.

Nevertheless, technically the bearish divergence in the RSI(14) on a daily time-frame is still on the table. So, while the door is open for a stint at the current Gold all-time high around 1,920 USD, Gold bulls still should stay cautious in regards to overly aggressive long engagements, even though from a fundamental perspective, the path higher seems set.

Fundamentally the driver higher can surely be found in the testimony from Fed chairman Powell in front of the US congress already last week on Wednesday.

While his remarks on his assessment of the current US economic situation and the taken measures of the Fed to counter the economic downturn driven by the ‘Corona lockdown’ didn’t surprise, the comments on the Fed not having a plan in regards to negative rates, despite US president Trump’s tweets last Tuesday and the market has priced-in Fed funds going into the negative in the futures market at the beginning of May for the first time ever, were mostly ignored with Gold pushing higher.

In fact, the statement seems clear here: “We expect the Fed to do everything they can and flood markets with trillions of US-Dollar if necessary – and thus push the price of Gold higher.”

Indeed, this expectation was partly confirmed from Powell last Sunday in CBS “60 Minutes” where Powell said, “In the long run, and even in the medium run, you wouldn’t want to bet against the American economy” while acknowledging that the unemployment rate could hit as high as 25%.

If today’s FOMC Minutes are interpreted in this direction as well, even though only between the lines, chances seem good that we already see the current all-time high in Gold get in our focus into the second half of the week.

Technically, the picture stays bullish as long as we trade above 1,660 USD:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between February 18, 2019, to May 18, 2020). Accessed: May 18, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of Gold fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.

Discover the world’s #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks

By Admiral Markets