Gold Prices Rally as US Dollar Strength Fades

Talking Points:

• Gold Prices Rally as US Dollar Strength Fades
• Intraday US Dollar Support is Found Near 100.63
• Next Resistance for Gold Price is Found Near $1,189.53

Gold prices have rebound from this morning’s low of $1,180.70, after the US Dollar initially rallied on better than expected GDP figures. US GDP (Annualized) was expected at 3.0%, but released at an actual 3.2%. If the US Dollar continues to retreat, this may signal a shift in momentum for commodities prices such as Gold. Traders should next be looking towards Friday NFP employment figures to better gauge the overall fundamental strength or weakness of the US Dollar.

US Dollar 30 Minute Chart with Pivots

(Created Using TradingView Charts)

Technically, the US Dollar Index (Symbol DXY) can be seen turning this morning at resistance near 101.43. This barrier is depicted above as today’s R3 pivot, and while prices have breached this point they have failed to trade significantly higher. This retracement has pushed the US Dollar back to support near today’s S3 pivot found near 100.90. If the US Dollar continues to weaken, traders may find next support for the Index under the current weekly lows of 100.63.

Gold Price 30 Minute Chart with Pivots

(Created Using TradingView Charts)

Gold prices are technically trading back above their weekly lows, and are attempting to move higher late into today’s trading session. Currently, prices are trading under Tuesday’s S3 pivot at $1,189.53. As a value of previous support, this pivot is now acting as short term resistance for Gold. If Gold prices strengthen later today, traders may look for the commodity to then press on resistance closer to $1,197.52. Despite bouncing this morning, Gold traders should remember that bearish breakouts may begin under $1,185.35. A move through this value should be seen as significant as it would suggest that the US Dollar is again beginning to strengthen.

--- Written by Walker, Analyst for DailyFX.com

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