Gold continues to be underpinned in post-Fed trading since last week, with dip buyers stepping in on Friday to reinforce their conviction. That is helping to build some added momentum today with price once again looking to contest the $3,700 level. So, what's next for gold this week?
The aftermath of the Fed is leading to a key takeaway that the onus is now on US data to prove the market pricing wrong on the Fed outlook. As such, US data will be one of the more important things in influencing dollar sentiment and the broader market mood.
This week will feature PMI data tomorrow but there will also be the weekly initial jobless claims on Thursday, though the big one will be the PCE price index on Friday. That alongside some continuation in Fedspeak of course. All that before we start gearing towards the most crucial one, which will be the US labour market report at the end of next week.
As such, gold will have to take clues from how traders are feeling about the dollar this week. And there might not be all too much to work with. In the bigger picture though, the bullish fundamental factors are going to keep underpinning gold and I don't see that changing.
With dip buyers also stepping in so quickly, it continues to reinforce the ongoing momentum we've been seeing since the upside breakout earlier this month. The sky's the limit for gold and even if there will be a brief pullback or correction, the play will continue to be a buy on dips.
The key thing to watch is whether or not that might come before we start to get closer to the stronger seasonal months in December and January.
