Global macro overview for 19/04/2016:
China is the worlds biggest producer and consumer of gold. It has overtaken India as the largest consumer as rising incomes and surging economic growth boosted purchases of jewelry, bars, and coins. Recently they have started a daily price fixing in an attempt to establish a regional benchmark and expand their influence on the global markets, especially London. Moreover, the central bank has been adding to its bullion stockpiles in order to diversify foreign-exchange reserves. In conclusion, today’s Chinese gold market capacity and potential are huge and their recent move will help enhance the impact of the renminbi on gold pricing.
Let’s now take a look at the yellow metal technical picture in the daily time frame. The market is still trading around the recent highs and the golden trend line still provides a valid support. Nevertheless, some first signs of a potential head and shoulders (H&S) pattern are visible. Any break out below the golden trend line ( neck line) will result in sell-off towards the level of 1191.
The material has been provided by InstaForex Company – www.instaforex.com
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