Gold has been stuck in this consolidation zone between 1241-1257. A strong upward trendline is starting to intersect with this consolidation zone which would allow gold to take some direction further down or a bounce to start rising in price. Fundamentally USD has been weakening against most currencies and its possible that it could fall further. The heavily correlated pair USD/JPY has been rising since the last weeks causing gold to consolidate as the rest of the USD pairs were falling. Now that USD/JPY has hit and rejected major resistances (see previous trade idea for UJ) we might start to see USD continue to fall and the safe haven yen strengthen taking gold up with it.
Keep in mind next week we have a couple bank holidays including the 4th of July and also NFP on Friday. Could see low volume during the start of the week and then a pick up in trading as the market sets up for NFP. If this NFP report is the second weak report in a row and already the FED and economic data has been casting doubts on a third rate hike most likely at the end of the year in December we could see gold go up for a ride as investors would definately be changing their outlook on the USD.
Keep in mind next week we have a couple bank holidays including the 4th of July and also NFP on Friday. Could see low volume during the start of the week and then a pick up in trading as the market sets up for NFP. If this NFP report is the second weak report in a row and already the FED and economic data has been casting doubts on a third rate hike most likely at the end of the year in December we could see gold go up for a ride as investors would definately be changing their outlook on the USD.
