News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Gold Prices Eye Consumer Confidence Data as Technical, Positioning Signals Clash

Gold Prices Eye Consumer Confidence Data as Technical, Positioning Signals Clash

Daniel Dubrovsky, Strategist

Gold, XAU/USD, Treasury Yields, CB Consumer Confidence, Technical Analysis - Talking Points:

  • Gold prices rallied to wrap up Monday’s trading session
  • Falling Treasury yields a factor, eyes on CB Confidence
  • Technical and positioning signals appear to be clashing

Gold prices aimed cautiously higher on Monday as the anti-fiat yellow metal continued its near-term uptrend since the beginning of October. The direction of the US Dollar and Treasury yields often have key influences on XAU/USD. Since the Greenback was relatively flat to start the week, it was the performance in US government bonds that likely boosted gold prices.

The 10-year Treasury yield dipped cautiously, but the move was not as aggressive as what was seen at the front-end. The 2-year bond yield dropped almost 4% on Monday, bringing it down to roughly 0.43% from last week’s close of about 0.46%. This could reflect ebbing hawkish Federal Reserve policy expectations following persistent gains since late September.

Falling yields can make the non-interest-bearing asset relatively more attractive. During Tuesday’s Asia-Pacific trading session, Treasury yields cautiously climbed, sending the yellow metal lower. Over the remaining 24 hours, gold will face US Conference Board Consumer Confidence data. A decline to 108.3 in October from 109.3 prior is expected. A worse outcome could weaken hawkish Fed bets, opening the door to a rise for the yellow metal.

Check out the DailyFX Economic Calendar for more key events!

Gold Technical Analysis

Gold continues to struggle around the 1808 – 1800 inflection zone on the 4-hour chart below. The most recent rejection was met with negative RSI divergence, showing that upside momentum was fading. That may open the door to a turn lower, placing the focus on the floor of a Rising Channel. A subsequent bounce off the floor may see prices resume the uptrend.

XAU/USD 4-Hour Chart

Gold Prices Eye Consumer Confidence Data as Technical, Positioning Signals Clash

Chart Created Using TradingView

Gold Sentiment Analysis - Neutral

According to IG Client Sentiment (IGCS), roughly 72% of retail traders are net-long XAU/USD. Short positioning is on the rise, increasing by 30.33% and 34.37% over a daily and weekly basis respectively. IGCS typically acts as a contrarian indicator. Since the majority of investors are net-long, the yellow metal may fall. But, recent shifts in positioning are producing a bullish-contrarian trading bias.

Gold Prices Eye Consumer Confidence Data as Technical, Positioning Signals Clash

*IGCS chart used from October 25th report

--- Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES