Gold Ascends to One-Month High

Daily Analysis - 27/03/2017

Precious Metal Breaks Key Level Driven by Doubts on Trump


Gold prices rallied over 1.00% on Monday to touch a one-month high after U.S. President Donald Trump failed to push through his healthcare reform legislation, raising doubts about the strength of his follow-through and agenda. The commodity was last trading around the $1255.00 mark after breaking above the key psychological level at $1250.00.

Safe Haven Demand Resurfaces Amidst Growing Uncertainty

President Trump faced a surprise reversal on Friday when members of his own Republican party failed to support legislation that would revamp the current U.S. healthcare system. This setback so early in his term has unnerved investors and increased concerns about his ability to see through his two primary campaign promises; the reformation of tax rules and massive infrastructure spending.

The U.S. dollar tumbled to an almost a two-month low against a basket of major currencies on Monday. Bullion gained $60.00 in value since March 15, when an outlook from the U.S. Federal Reserve that was less hawkish than anticipated brought buyers back in to the market. However, technical analysts estimate that upside may be capped, as gold approaches its 200-day moving average at $1260.50, which is widely considered as a very strong resistance zone.


Japanese Firms Mull Slower Pay Hike

A Reuters survey revealed that a vast majority of Japanese firms say they plan to increase wages at a slower pace compared to last year, thwarting Prime Minister Shinzo Abe's efforts to lift the faltering economy through higher wages and the resulting surge in consumption. According to the Reuters Corporate Survey, only 19.00% of businesses said they were willing to hike monthly wages by 2.00% or more, compared to the 2.14% average raise at major firms recorded last year.

This was the first broad-based poll aimed at gauging corporate Japan's outlook on wages, after most big firms announced the outcome of their wage negotiations with unions on March 15. USDJPY has been falling in early Monday trade after breaking below the key support level at 110.600.


Total Jobless Metric Dips in France

Data shown late Friday saw the total number of jobless citizens in France edging lower in February, in a fresh sign of gradual strengthening in the labour market. The French Labour Ministry said that the total number of people registered as “out of work” in the country fell by 3,500 last month to 3,464,400. On a year-over-year basis, this translated to a 3.20% decline.

The latest positive figure should confirm the view that the recovery in the jobs market has finally taken hold, and comes close on the heels of surveys that show activity in the French private sector gathering speed towards near-six year highs. EURUSD managed to climb above the important resistance level at 1.08200 in Monday’s early trading session, with the pair currently hovering around 1.08450.


Analysts Keep Lifting Apple Price Targets

Apple Inc. stock is flirting with record highs, but that has not stopped two leading analysts from raising their price targets for the stock. Nomura’s Jeffrey Kvaal reaffirmed his buy rating on Apple and upped his target price to $165.00 from $135.00, while Needham’s Laura Martin also lifted her price target to $165.00 from $150.00 a share, though she downgraded the rating from a “strong buy” to “buy.” Given the large user base of older iPhones, investors are currently underestimating the upgrade potential of the iPhone 8, expected to debut in September, Kvaal said.

Meanwhile, RBC Capital Markets reiterated their “outperform” rating on late Friday with a $155.00 price target. Apple shares were last trading just above the $140.00-mark, with immediate resistance seen around $145.00.


Upcoming Events

  • Time
  • Currency
  • Event
  • Forecast
  • Previous
  • 9:20 GMT
  • EUR
  • ECB's Lautenschlaeger Speaks
  • 12:00 GMT
  • EUR
  • ECB's Praet Speaks
  • 17:15 GMT
  • EUR
  • ECB's Praet Speaks
  • 22:00 GMT
  • AUD
  • RBA Assist Gov Debelle Speaks
  • 22:30 GMT
  • USD
  • FOMC Member Kaplan Speaks

This website uses cookies to ensure best possible user experience. Read more