Weaker US data and ongoing global uncertainty and volatility has seen gold price rise. When it comes to the uncertainty side of the equation, this week saw OPEC+ surprise the markets with a production cut. Oil gapped up, and with rising prices, it makes the Fed’s job a bit more complicated. Higher oil prices will translate to an uptick in inflation. With inflationary pressures remaining elevated, money will flow into gold to protect purchasing power.
When it came to the US data, US job openings tumbled below 10 million for the first time in nearly two years. The Fed’s effort to slow the labor market (avoid the r word! recession) seems to be working.
Available positions totaled 9.93 million, a drop of 632,000 from January’s downwardly revised number, the Labor Department reported Tuesday in its monthly Job Openings and Labor Turnover Survey. Wall Street had been looking for 10.4 million.
US factory orders declined more than expected adding more strength to the economy slowing down narrative. Orders for manufactured goods decreased $3.9 billion or by 0.7% in February to $536.4 billion. This print followed January’s decline of 2.1% and came in worse than the market expectation for a decrease of 0.5%.
Weaker US data has seen the dollar drop, adding to the bullishness we see in gold.
Money runs into gold when there is fear. Some call it the true confidence crisis asset. When people lose confidence in the government, central banks and the fiat currency, money flows to the asset that has always been money regardless of the regime for thousands of years.
The above points I mention cover the central banks and fiat currency. You can also add in the banking crisis which may not be over. When it comes to the government side of things, you do have the debt ceiling coming up… and perhaps both sides may fail to come to a compromise given the recent Trump news. Goodbye bipartisan?
When it comes to the technicals of gold, I did tell readers that major breakouts were triggered on gold when it comes to other fiat currencies.
In a previous article, I outlined this major breakout on the gold weekly chart priced against the USD:
I even stated that a retest down retest the upper trendline of the flag pattern could happen before the next leg up.
This is exactly what happened:
Gold found buyers on the retest of the trendline at $1960, and the next upside target is previous record highs around the $2070 zone. This leg higher could easily take us into new all time record highs just given the recent market structure. We have higher lows and higher highs. The next higher high will have to breakout into new all-time highs.
How can a trader play this now? Let’s go down to the daily chart.
The uptrend is apparent, which means you want to buy the pullbacks. $2000 is an important psychological number, and is where gold broke out. It is now an interim support and I would expect to see buyers enter on pullbacks which come close to $2000. As mentioned earlier, the $1940-60 zone is your major support and higher low which is upholding the current uptrend.
Both the fundamentals and technicals are aligning for new gold record highs against the US Dollar.
But let’s take a look at a few gold charts I covered in my previous article.
Gold against the Australian Dollar printed record highs in the week of March 13th 2023. Now, new all time record highs have printed with Gold hitting $3030.02 in Australian Dollars. The uptrend remains intact.
Gold vs the British Pound looks very appealing for a technical trader. Gold also printed new highs against the Pound during the week of March 13th 2023. We then pulled back to retest the breakout zone, and this week saw the buyers step in. Just a basing breakout and retest pattern which will lead to recent highs being taken out… which means new record highs are coming.
In the same technical pattern boat as Gold vs the British Pound is Gold vs the Indian Rupee. Same breakout and retest pattern but this chart has already printed the new highs this week by taking out the previous recent highs. Expect the same type of move in Gold vs the Pound.
Gold vs the Japanese Yen remains in a strong uptrend after breaking out of a range. New record highs were printed this week and more are likely to come with this chart looking very bullish.
Gold vs the New Zealand Dollar made new record highs during the week of March 13th 2023. The same pullback and retest structure is playing out. We remain bullish.
And let’s end with Gold vs the Canadian Loonie. No new record highs just yet, but we are only a few dollars away from printing a breakout. We shall see if Gold vs the Cad rejects here, or if momentum in Gold takes us higher. With all the strength we are seeing in the gold markets AND strong fundamental reasons for Gold to be bullish, I would think we are on the verge of printing new all time record highs in Canadian Dollar terms.