Spot gold prices are on a strong uptrend, holding steady right below a multi-week high. That strong move higher has accomplished placing gold price bulls squarely in the drivers seat, prevailing with a near-term technical posture that favors additional advances. This is leading market participants to look under the hood to understand what is driving these changes. Moreover, they have focused their attention on AUD/USD which is primed for an upside breakout above the key psychological 0.6500 level.
Over the past few sessions, gold prices have broken out again, heading to near their highest levels in over six weeks. Given that this peak’s consolidation phase has shown relatively strong bullish sentiment is still alive among investors. Analysts predict a very positive environment for the price of gold. Several major economic indicators are stoking rising demand for this shiny, golden metal.
The outlook for the AUD/USD currency cross is more positive. Bulls are preparing to facilitate a breakout through the bear market’s short-term trading range. Traders are looking to ride any new bullish momentum. They want to see the couple push well beyond the key 0.6500 line in sand. There is now speculation over upcoming trump-xi calls, if only from our friends at Axios. This has increased the focus on the currency pair’s movements, with market participants keen to see how these geopolitical events will play on the Australian dollar.
USD/JPY has been performing the opposite, often fighting to stay above the mid-142.00s. Despite this vulnerability, the currency pair has – as yet – been able to sustain support at this round number. For now, this support is keeping a huge drop at bay. Analysts point out that USD/JPY has run out of momentum after the retracement drop from its recent weekly peak. Equity traders now are closely watching whether it can gather strength again or whether it has further downward moves ahead.
As market dynamics continue to shift, both gold and currency traders remain attentive to upcoming economic reports and geopolitical events that could influence their strategies. The dynamic between gold prices and currency values gives a glimpse into the complexities of today’s market. When one asset class starts printing bullish signals, it can have a dramatic effect on the other.