European Open: Is gold building up towards its next leg higher?

Whilst gold prices are meandering around $1800, we take comfort in the fact support has been established around 1783.

Charts (5)

Asian Indices:

  • Australia's ASX 200 index rose by 41.4 points (0.59%) and currently trades at 7,073.90
  • Japan's Nikkei 225 index has risen by 337.02 points (1.18%) and currently trades at 28,884.00
  • Hong Kong's Hang Seng index has fallen by -56.83 points (-0.28%) and currently trades at 20,118.79
  • China's A50 Index has fallen by -39.7 points (-0.29%) and currently trades at 13,669.68

 

UK and Europe:

  • UK's FTSE 100 futures are currently up 38.5 points (0.51%), the cash market is currently estimated to open at 7,539.39
  • Euro STOXX 50 futures are currently up 15 points (0.4%), the cash market is currently estimated to open at 3,791.81
  • Germany's DAX futures are currently up 45 points (0.33%), the cash market is currently estimated to open at 13,840.85

 

US Futures:

  • DJI futures are currently down -64 points (-0.19%)
  • S&P 500 futures are currently down -33 points (-0.24%)
  • Nasdaq 100 futures are currently down -9.25 points (-0.22%)

 

20220815futuresFX

 

 

Weak data prompts PBOC to cut interest rates

A host of weak data for China weighed on their share markets overnight, seeing the China A50 and Hang Seng hand back earlier gains and trade around -0.1% from Friday’s close. Retail sales fell to 2.7% y/y (3.1% previously), or down -0.21% YTD. House prices contracted -0.9% y/y whilst industrial output and urban investments also softened. The PBOC (People’s Bank of China) also surprised traders with an interest rate cut.

 

Economists favour 50bp BOE hike next month

59% of economists polled by Reuters expect the BOE (Bank of England) to hike interest rates by 50bp at their next meeting, before slowing down to 25bp increments thereafter. And this is despite the BOE’s own admission that they expect the UK economy to print 5 consecutive quarters of GDP and remain in a recession until 2024.

 

Gold 4-hour chart:

Gold is within a clear uptrend on the 4-hour chart and shows the potential to break higher, having established support around 1783. The 50-bar eMA has crossed above the 200-bar eMA and prices look set to break above the 1783 – 1800 range. The initial target for bulls is around the monthly R1 pivot / 1820, a break above which brings 1840 into focus.

20220815goldFX

 

 

FTSE 350 – Market Internals:

20220815moversFTSEfx

FTSE 350: 4184.46 (0.47%) 12 August 2022

  • 199 (56.86%) stocks advanced and 131 (37.43%) declined
  • 5 stocks rose to a new 52-week high, 2 fell to new lows
  • 39.43% of stocks closed above their 200-day average
  • 80% of stocks closed above their 50-day average
  • 17.43% of stocks closed above their 20-day average

 

Outperformers:

  • + 14.10% - Flutter Entertainment PLC (FLTRF.L)
  • + 11.22% - Mondi PLC (MNDI.L)
  • + 6.73% - TBC Bank Group PLC (TBCG.L)

 

Underperformers:

  • -10.81% - 888 Holdings PLC (888.L)
  • -3.85% - QinetiQ Group PLC (QQ.L)
  • -3.81% - Syncona Ltd (SYNCS.L)

 

 

Economic events up next (Times in BST)

German wholesale prices remain a key inflationary input and rose over 20% despite coming in softer over the past two months. Today’s report at 07:00 BST will reveal if it can soften further.

US homes builder confidence is released at 15:00. Whilst not a widely followed indicator, its importance has only increased as interest rates have risen. At 55, it sits at its most pessimistic level since the pandemic and the report also sheds light on expected future sales.

20220815calendarBST

 

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

  

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account