Talking Points
- Gold Prices Remain Supported Near Today’s Low of $1,302.28
- Friday’s NFP Announcement May Provide Breakout Opportunities
- If you are looking for more commodity trading ideas?, check out our Gold & Oil Trading Guide
The price of Gold has found temporary support after breaking to a new weekly low at $1,302.28. Traders will continue to watch support going into tomorrow’s NFP event, as Gold prices may continue to break lower or potentially bounce in a developing descending channel. Expectations for tomorrows NFP event are set at an estimated 180k, and any deviation from this value has the potential to add volatility to an already active Gold market.
Gold Price, Daily Chart & Channel
(Created by Walker England)
In the 10-minute graph below, we can see Gold prices rallying from their daily low. The Grid Sight Index (GSI) however has suggested that price action is now trading in a short-term downtrend with the creation of a series of lower lows in the last hour. After reviewing 17,584,838 pricing points, GSI has advanced $4.60 in only 36% of the identified 22 matching historical events. This places today’s first bullish distribution for Gold at a price of 1,316.60. Traders looking for a continuation of this morning’s bullish momentum should first look for Gold to break to a new daily high above $1,315.02, and then proceed to test this $1,316.60.
Alternatively, the first bearish distribution for Gold is found at $1,309.80. GSI has indicated that prices have declined by $2.20 or more in 50% of the matching 22historical events. Traders looking for a resumption of the pair’s overnight downtrend should first watch for price to trade through this value. It should be noted that the final bearish distribution is found at a price of $1,303.80. GSI has indicated prices have declined $8.20 pips in just 14% of the historical matches. A move to this point should be considered significant as it would place the price of Gold just off of their daily lows.
Want to learn more about GSI? Get started learning about the Index HERE.
The ratio of long to short positions for Gold (Ticker: XAU/USD) stands at +2.24. With 69% of traders positioned long, this SSI (speculative sentiment index) reading is extreme. Typically, this is interpreted as a signal that the price of Gold may decline further. In the event that Gold trades to new weekly lows during NFP, traders should look for SSI to remain extreme. Alternatively, in the event of bullish breakout, traders should look for SSI to neutralize back towards negative readings.
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