Gold Futures Still Have Room to RunTechnical Momentum Strengthens
Gold Futures hit an all-time high in 2024 at $2,448 on the June futures contract on April 12. Futures remain firmly above the rising 50-day Moving average at $2,184 and well above the 200-day Moving Average at $2,072. The technical perspective shows momentum studies accelerating, with the 9-day moving average gaining momentum above the 18-day.
Stochastics are in overbought territory above 80, and DMI + and DMI—are firmly positive, indicating that the bullish trend may have more room to run.
Tailwinds Continue to Develop
According to the CME's Fedwatch tool, Looking out to June, swaps are pricing in a 15% chance that the Fed makes its first interest rate hike in the cycle. At the same time, September shows a much higher probability, closer to 60%.
Geopolitical tensions, rampant fiscal spending, and central bank buying have been the main drivers and have helped propel Gold prices recently.
Industrial Metals Strengthen
Performance remains strong in the Precious Metals space and has continued to spill into the industrial complex. A pick-up in manufacturing, a jump in Chinese GDP, and a resilient U.S. economy have fueled a broad-based rally in copper and silver.
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*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
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