Gold prices setting the stage for a new move
With the volatility on the forex market dropping lower and lower, we are focusing on the possibilities provided by the most precious of precious metals - gold. Prices have been consolidating in recent sessions before picking the next major move. With the geopolitical pressures abating somewhat in recent days, the main cues will come from economic data.
The key block of economic data key to the next major move in Gold prices is related to the central bank policy meetings which have passed today and the non-farm payrolls figures that are coming up on Friday. The consensus estimates are centered around 205,000, which is a possibility having in mind today's steady ADP report.
There are some key levels on the chart that all binary options traders who focus on gold must keep track of, however we will first mention the most important risk going ahead for the price of gold. That is the conflict situation between Russia and Ukraine and the upcoming elections in the latter country.
An uprising in the Eastern part of Ukraine is continuing with armed pro-Russian separatists taking charge of a couple of cities in that area of the country. The capital Kiev, is rapidly losing control of the situation and that drives some safe-haven demand to the precious metal from investors worried about further escalations.
That said, the rhetoric from Russia has softened in the past couple of days, and it has announced the withdrawal of troops from the bordering area between Russia and Ukraine. Will it be enough to subside tensions in the current environment - highly unlikely.
On the other hand the non-farm payrolls data on Friday might provide fresh impetus for the US dollar bulls. While the majority of players believes that the number will come out around 205,000, we are of the opinion that the number could be higher than that.
Looking at the charts key levels to be observed are $1296.50-1297 on the upside and $1285-1285.50 on the downside. For now we would be keen to buy daily puts at $1297, however if we get a break on a sustained hourly basis above $1300 we would be reversing our positions, doubling the bets and buying calls at that level.