Search LOGIN

Gold futures back above $2k!!

EUR/JPY – Weekly Candlesticks
Source: GKFX / MT4 (August 18, 2020)

EUR/JPY has gained for 7 of the past 8 weeks and has run into previous support/resistance pivotal zone around 127. 


•    Gold futures rise back over $2000 per oz
•    S&P 500 closes higher but no record yet
•    Oil prices gain after US confirms China purchases, OPEC compliance
•    DAY AHEAD: RBA Meeting minutes, US housing starts, Walmart earnings


The US dollar tended to the downside again on Monday, with small losses in the dollar index leaving it just above 2-year lows. EUR/USD rose but fell short of 1.19, while GBP/USD managed a close back above 1.31 and USDJPY slid back to 106.
Gold benefitted from the dollar weakness as well as the news that Warren Buffet had acquired a stake in Barrick Gold, the world’s second biggest gold miner. Gold futures rose back above $2000 per oz, while spot gold remained just short of the key level. Crude oil had a good day on reports China will increase its imports of US oil as part of the US China trade deal.

Shares in China shot higher following a liquidity injection from the PBOC of 900 billion yuan ($100 billion) into the banking system. Wall Street was mixed with the S&P up but short of a record high while the Dow finished lower as tech shares gained but cyclicals underperformed.


“Fear incites human action far more urgently than does the impressive weight of historical evidence.” – Jeremy Siegel

Gold 2k

The $2000 round number is a key level to watch for any resumption of last week’s sell-off. The level could see short-term buyers exit and sellers who missed the first drop sell the bounce. 

Famed gold bug Peter Schiff commented that ‘historically big corrections have been a normal feature of gold bull runs’. His point being that the biggest daily price moves in bull markets are always counter to the trend, i.e. down. A close back above $2000 in spot gold would be some confirmation that Tuesday’s big drop was a ‘flash in the pan’.

China buys oil

The price of oil jumped on Tuesday, breaking a streak of very low volatility trading. WTI rose over 2% after US officials confirmed China was making the necessary agricultural and energy purchases from the phase one trade deal. Additionally, OPEC+ producers reportedly met quotas with a 97% compliance rate. The reports come ahead of the official meeting of the JMCC – a committee that oversees the compliance rate of the producers from the oil cartel and its allies.

S&P Cyclicals

A move higher in only the tech stocks might not be enough for the upcoming breakout in the S&P 500. A move higher in cyclical shares – perhaps inclucing Walmart and Home Depot – who report earnings on Tuesday – might be what’s needed to give the breakout more breadth and endurance. 


The best way to keep track of your accounts. Get notifications
and access your dashboard anytime!

Open a live or demo account, make secure deposits, or get the latest
market updates for free!