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"Negative interest rates should be positive for gold. According to the SNB press release, the decision to lower interest rates sizably was made to avoid unintentional tightening of monetary conditions following the removal of the exchange-rate floor."
- UBS (based on MarketWatch)
Pair's Outlook
The yesterday's unexpected action of the SNB to decrease a deposit rate further to -0.75% and give up the franc's cap drove Gold considerably to the north. As traders were hedging from potential risks, the bullion climbed above the 50% Fibonacci retracement to close the day at $1,266, up more than $35 per ounce from the daily opening level. As a result of that, a number of major resistances were crossed, including monthly and weekly R1. For now we may observe some correction down to weekly R2 at $1,254. In the medium-term, both daily and weekly technical studies are now giving bullish signals.
Traders' Sentiment
Distribution between opened positions for buying and selling Gold is still remaining strongly positive and in favour of former, as bulls have a majority with 68% of all trades, a decrease of 5% during last 24 hours.
© Dukascopy Bank SA