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Gold broke out of range thanks to dollar weakness



At the end of the week, the dollar is not in the best position, although it has stabilized in the main pairs after the recent sell-off on the decline in Treasury yields in response to dovish comments from the Fed. One of the representatives of the Central Bank made it clear that even if today’s data on the labor market comes out strong or exceeds expectations, this will not affect the intentions of the regulator, which is still not planning to start tightening monetary policy. We will remind, earlier the USD showed a rally against the background of comments by another Federal Reserve official that the Central Bank may have to start curtailing incentives at a certain stage in order to avoid overheating of the economy. In other words, a split is ripe in the FOMC camp, which is beneficial to the dollar bulls, because until recently the representatives of the Fed did not voice hawkish hints. Taking advantage of the current weakness of the dollar, the price of gold, which has been growing for the third day in a row, soared to the highs of mid-February in the region of $ 1,823 per troy ounce in trading on Friday and maintain a bullish bias during the European session. On the eve of the quotes, they easily overcame the 100-day moving average, which has been a resistance since the beginning of this year. Also during the rally, the metal exceeded the psychologically important level of $ 1800. Now the task of gold is to maintain the conquered positions, which will not be easy if the dollar bulls return to the game with renewed vigor. In any case, the technical picture has improved markedly after the recent bullish breakout, and the price out of the range could lead to new highs if the Fed continues to reassure the markets in the coming days that there are no intentions to tighten policy ._________________________ Nikolay Pereslavsky, Economic and Financial Research Officer, CMS Institute

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