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GOLD

Market Opportunities - 10/05/2021

10 May, 2021

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

GOLD weekly uptrend opportunity based On 1.00 Lot Calculation:

  • EVENT: US INFLATION (CPI) FOR APRIL (May 12 at 13:30 GMT+1). Inflation has continued to rise moved up by high stimulus packages provided by the US Federal Reserve and the US Congress. The headline inflation is expected to rise 3.6% on yearly basis in April, which would be the highest since 2011 (March inflation stood at 2.6%). A rising inflation usually increases demand for gold as the asset is traditionally considered as store of value, which tends to protect the purchasing power of people’s wealth amid higher inflation.
  • US FEDERAL RESERVE KEEPS PRINTING MONEY TO HELP THE US ECONOMY AS APRIL JOBS CREATION FALLS SHORT OF EXPECTATIONS: The Fed policymakers are expected to keep interest rates unchanged close to 0.00% until the end of 2023. They are also expected to continue to purchase 120 billion dollars of bonds per month in 2021 (equivalent to 1.44 trillion dollars per year). Nonfarm Payroll data for April showed an increase of 266K, amid expectations for an increase of 978K. The unemployment rate rose to 6.1%, missing expectations for a decline to 5.8%.
  • US FISCAL STIMULUS: US President Joseph Biden signed the $1.9 trillion stimulus into law on March 11. In December 2020, the U.S. Congress approved an $892 billion coronavirus aid package. Infrastructure bill that could be worth around 2 trillion dollars has been also discussed. President Joe Biden laid out a $1.8 trillion social-support plan and infrastructure bill worth $2.25 trillion dollars.
  • CHINA TO INCREASE GOLD BUYING (APRIL AND MAY): China has allowed international and domestic banks to import greater amounts of gold, Reuters reports. The People’s Bank of China usually allows enough metal in to satisfy local demand, but sometimes restricts the flow. In recent weeks, however, it has allowed large amounts of bullion to enter. Around 150 tonnes of gold worth $8.5 billion has been reported to head to China in April and May.
  • ANALYSTS OPINION (GOLDMAN SACHS/BANK OF AMERICA/CITIGROUP/WELLS FARGO/COMMERZBANK): GOLDMAN SACHS has a target price of $2000. BANK OF AMERICA 2021 estimate averages at $2063. CITIGROUP price target stands at 1950. WELLS FARGO sees Gold at $2100- $2200 in 2021. COMMERZBANK expected gold prices to return to $2000 by the end of the year.

GOLD, May 10, 2021
Current Price: 1830

GOLD

Weekly

Trend direction

UP

Resistance 3

1950

Resistance 2

1900

Resistance 1

1875

Support 1

1785

Support 2

1770

Support 3

1750

Example of calculation base on weekly trend direction for 1.00 Lot*

GOLD

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

12,000.00

7,000.00

4,500.00

-4,500.00

-6,000.00

-8,000.00

Profit or loss in €**

9,883.62

5,765.45

3,706.36

-3,706.36

-4,941.81

-6,589.08

Profit or loss in £**

8,532.30

4,977.18

3,199.61

-3,199.61

-4,266.15

-5,688.20

Profit or loss in C$**

14,526.96

8,474.06

5,447.61

-5,447.61

-7,263.48

-9,684.64

* 1.00 lot is equivalent of 100 units
** Calculations for exchange rate used as of 9:00 (GMT+1) 10/05/2021
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.
*** You may wish to consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Client Manager for more details

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