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Gold Recovers as Greenback Slips

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On Friday, the Greenback declined slightly vs. a basket of major currencies after the USD touched a 14-year high in response to the Federal Reserve’s monetary policy decision. The U.S. dollar traded at 102.90.

It is worth saying that the U.S. dollar index rose as much as 1.2% to touch its best daily percentage increase in six months after the U.S. Federal Reserve raised rates for the first time in a year and signaled that it would likely increase rates three more times next year.

Gold traded above its lowest level in 10 and half months in the previous week, as the U.S. dollar declined vs. a basket of currencies.

Gold settled above the support of $1,330 and moved to $1,336. Technically, the yellow metal is unlikely to trade above $1,350.

Sterling pound is at a 3-week low against the dollar after Federal Reserve increased interest rates for the first time this year.

GBP settled at $1.25 vs. USD and could trade under pressure during the next time, negatively affected by a strong USD.

Oil prices touched a new 17-month high as major producers showed signs of adhering to a global agreement to cut output.

WTI pared most of its losses and touched $53 which was still far from the top levels which were recorded after non-OPEC members have agreed to reduce output.

The most important economic events:

  • EUR German IFO - Business Climate (DEC): (GMT: 11:00) – Medium – Forecast (110.6) – Previous (110.4).
  • EUR German IFO - Current Assessment (DEC): (GMT: 11:00) – Medium – Forecast (115.9) – Previous (115.6).
  • USD Markit US Composite PMI (DEC P): (GMT: 16:45) – Medium – Forecast (N/A) – Previous (54.9).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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