Gold Price Forecast: Rising Yields Complicate Rebound Effort - Levels for XAU/USD
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Gold Price Outlook:
The shiny metal rockdoesn’t offer a coupon, dividend, or cash flow. Comparatively speaking, this leaves gold at a disadvantage in an environment defined by appealing growth prospects and rising real yields (returns in excess of inflation).
Gold prices are struggling to climb back above the downtrend from the January and February swing highs, and in turn, have not yet reclaimed the rising trendline from the March and November 2020 lows – the pandemic uptrend.
According to the IG Client Sentiment Index, gold prices have a bullish bias.
EUR/CHF Breakout Signals Risk-On in Europe; EUR/NOK, EUR/SEK Test Key Support
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Euro Outlook:
The Euro has been left to the whims of broader markets, but a look at some of the non-major EUR-crosses suggests that risk appetite continues to improve.
While EUR/CHF rates have broken out higher, EUR/NOK and EUR/SEK rates remain within consolidations that have bearish inclinations.
Non-Major EUR-crosses Look Optimistic
In recent days we’ve looked at the major EUR-crosses, surmising that the Euro itself is without a major thematic influence and instead remains at the whims of the broader markets. Considering another perspective, looking at the Euro through the lens of non-major EUR-crosses, a similar story unfolds: there is no singular thread driving price action around the Euro itself. Instead, taking recent pricing action in aggregate in EUR/CHF, EUR/NOK, and EUR/SEK rates, a narrative unfolds: risk appetite is improving, plain and simple.
Crude Oil Prices Explode Higher - Are Gains Sustainable? Advertisement
Crude Oil Outlook:
In energy markets, prices are reflecting a battle of the fundamentals: short-term (cold spell in US) versus long-term (significant supply on sidelines).
Crude oil prices are nearing the January 2020 high, and in doing so, are readying a test of the descending trendline from the July 2008 (all-time high) and June 2014 highs. A significant bottom may be in place soon.
Recent changes in retail trader positioning gives us a bullish bias towards crude oil prices.
Crude Oil Prices Near 2020 High
In energy markets, prices are reflecting a battle of the fundamentals: short-term versus long-term. In the short-term, a cold spell that has swept across the midwestern US has buffeted energy markets to their highest levels since January 2020. A crippled US energy supply has help bolster the supply-demand imbalance that’s been the driving force in markets for the past several month
US Dollar Forecast: Back to the Year-Long Downtrend - Levels for DXY Index, USD/JPY Advertisement
US Dollar Outlook:
The US Dollar (via the DXY Index) continues to contend with its pandemic trendline, a magnet for price action throughout February.
The January US durable goods orders report on Thursday and the January US inflation rate (PCE) report on Friday are the top data releases in the coming days, while Fed Chair Powell’s testimony on Capitol Hill will bring the usual fireworks.
US Dollar Looking for Direction
The US Dollar (via the DXY Index) continues to contend with its pandemic trendline, a magnet for price action throughout February. Potent catalysts are few and far between over the coming days, with the January US durable goods orders report due on Thursday and the January US inflation rate (PCE) report due on Friday. There’s little else (data-wise) that will help define price action beyond the weekly US jobless claims figures.