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A1 Trading

Why Gold Is Going Over $2000

March 23, 2023
Frank Cabibi

This week, we have seen a lot of market swings in sentiment along with uncertainty around economic stability. Because of this mixed mindset, investors have been shifting their interest towards gold. This article will cover why gold could continue to move higher.

Medium to high impact news is coming up for all currencies such as AUD, CHF, GBP, USD, EUR, JPY & CAD.

EdgeFinder Analysis

AUDNZD is a new strong sell rating on the EdgeFinder. At -7, the kiwi fundamentally beats the buck in all categories except GDP growth. Despite a slow in GDP growth - which could be a result of much higher interest rates - NZD has a better handle on inflation.

Although retail usually moves opposite of COT, it seems to agree on being short kiwi. However, institutions are largely short AUD as well. The mid term target for this pair is another -0.50% lower at 1.06353.

NZDCAD is now a +5 buy from yesterday's +2 neutral. As the pair retests a falling trend line on the 1D timeframe, it could be looking to break higher. A previous top lies around 0.86148 should price break the trend line. The fact that price hurriedly returned back up to the recent highs could be an indication of a bullish move.

In order to confirm a bullish move, we would need to see a close above that line. Next week's CPI report on the buck will also help shape the score of the EdgeFinder. If CPI gets closer to the kiwi's level, the score will shift towards a neutral rating.

Gold continues to move higher in light of the banking crisis last week and the FOMC report yesterday. Regardless of where the Fed shifts focus, gold has an argument to the upside. Some reasons for that include the SVB and Credit Suisse collapse. Investors have been shifting focus from stocks to treasuries, gold and crypto as a result of an 'unstable' sentiment towards banks.

In terms of current economic conditions, people seem to be more comfortable in putting their finances in assets that go against risk. Gold is historically that type of asset, regardless of moving similar to the dollar.

Seasonality Spotlight

Gold's seasonality going into next month is close to no gain on the 10 year average and positive gain on the 5 year average. The next three months after March are considerably bullish from the past 5 years' data but not for the last 10 years.

Bank Signals Spotlight

Bank signals and analyst signals point toward a higher EURUSD for the most part. The only outlier is Goldman Sachs who is mostly bearish with a quarterly view.

Fundamental Spotlight

The Fed Tracker shows the latest stances from the Fed regarding monetary policy now and going forward. Forecasts say that rates won't go higher than 5.25% interest for the remainder of the year. The Fed has been clear that it will depend on future inflation numbers, but the "ongoing" hike sentiment is not as prevalent.

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DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
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