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.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The Indian Rupee 2020 outlook is bearish as India faces stagflation risk amid rising onion and crude oil prices. $USDINR may rise in the medium-term as the RBI defers hiking rates. Get your market update from @ddubrovskyFX here: https://t.co/lRrlZjAQDw https://t.co/mFv1EOYMjG
  • The $GBP may be on the cusp resuming a 12-year downtrend against the US Dollar as signs of topping emerge at pivotal chart resistance. Get oyur market update from @IlyaSpivak here:https://t.co/9rM3OjWmBA https://t.co/sUWcSFruHw
  • The $NZD may be on average at risk to further losses against its major counterparts such as the US Dollar and Japanese Yen. Where to for NZD/USD and NZD/JPY from here? Find out from @ddubrovskyFX here:https://t.co/OFjePKYdCb https://t.co/eo1c6QAVd8
  • $AUDJPY technical positioning hints prices may be on cusp of turning lower after a late-2019 bounce, recoupling with a dovish RBA policy outlook. Get your market update from @IlyaSpivak here: https://t.co/z84Y0V0ZtH https://t.co/wcIGO1emDw
  • The Japanese Yen has faded into 2020 as market risk appetite has held up and hit demand for haven assets. $USDJPY now challenges a key medium-term downtrend, but hasn’t topped it yet.Get your market update from @DavidCottleFX here:https://t.co/4X6vgCgkB7 https://t.co/FfCkGhtHsm
  • The $USD may fall against the Swedish Krona and Norwegian Krone if commentary from officials at the Davos forum uplift market mood and pressure haven-linked currencies. Get your market update from @ZabelinDimitri here:https://t.co/SZAG0yMu3d https://t.co/cBZj5tC0Ny
  • The $NZD is inching toward support guiding gains in the fourth quarter of 2019. A break may set the stage for long-term bearish trend resumption. Get your market update from @IlyaSpivak here:https://t.co/bnlx4RJ8oV https://t.co/d60YziMYnO
  • $Gld prices are poised to mark the highest weekly-close in nearly seven-years, but the bulls aren’t in the clear yet. Here are the XAU/USD levels that matter next week. Get your $XAUUSD technical analysis from @MBForex here: https://t.co/yeTH6HwncQ https://t.co/6sIpxTSNaX
  • Video https://t.co/PZeqhLumSR
  • The $USD rose as the Singapore Dollar, Malaysian Ringgit and Philippine Peso fell on coronavirus fears. What is the technical outlook for USD/IDR, USD/SGD, USD/MYR and USD/PHP? Find out from @ddubrovskyFX here: https://t.co/G3GmyOe4IT https://t.co/iq7ajeP6iv
Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

2018-03-03 05:40:00
Michael Boutros, Technical Strategist
Share:
Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

Fundamental Forecast for Gold: Bullish

Gold prices are lower for the second consecutive week with the precious metal off by nearly 0.6% to trade at 1320 ahead of the New York close on Friday. Despite the decline, price are poised to close the week well-off the lows after a sharp reversal off support on Thursday.

An announcement by President Donald Trump regarding intentions to levy steep tariffs on imported steel and aluminum sparked a substantial sell-off in broader equity markets with traders finding solace in perceived safety of Gold. The move fuels concerns that retaliation from competing countries could instigate a global trade war. This protectionist take on policy may continue to put a floor under gold prices which are still up more than 1.6% year-to-date. Still, there is an opposing force at play.

The focus now shifts to key central bank rate decisions next week from the RBA, BoC, BoJ and ECB with the release of the February U.S. Non-Farm Payroll figures (NFP) highlighting the economic docket. For gold, the emphasis will remain on the wage growth numbers next Friday as the inflation outlook remains central focus for the Federal Reserve. As it stands, market participants are factoring three rate hikes this year, (starting with this month) and if the inflation picture improve expectations for higher rates may weigh on demand for gold which does not pay a dividend.

It is this tug of war between interest rate expectations and the perceived threat of inflation / geological risk that has fueled four swings of more than 4% on either side over the past two months. Despite the surge in volatility however, the technical levels remain clear with this week’s low marking a precise 100% extension off the highs- so is a low in place?

New to Trading? Get started with this Free Beginners Guide

Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?
  • A summary of IG Client Sentimentshows traders are net-long Gold - the ratio stands at +2.61 (72.3% of traders are long)- bearishreading
  • Long positions are 2.8% higher than yesterday and 8.6% higher from last week
  • Short positions are15.0% lower than yesterday and 20.4% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias from a sentiment standpoint.

See how shifts in Gold retail positioning are impacting trend- Read more about how to impliment Sentiment in your trading!

Gold Weekly Price Chart

Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

Last week we noted that, “Weekly support rests with the yearly open / April swing highs at 1295-1302.” Price reversed sharply off this threshold this week. Initial weekly resistance remains steady at, “the 2016 high-day close at 1366. Critical resistance remains up at 1380/92 where the 2014 high and 38.2% retracement converge on the median-line of the 2013 broader pitchfork formation (blue).”

Review Michael’s educational series on the Foundations of Technical Analysis

Gold Daily

Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

Price Chart

Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

The daily chart highlights a pair of parallels (red) continuing to govern price action since the yearly high with gold rebounding sharply off confluence support at the lower parallel this week. Initial daily resistance stands at median-line / 38.2% retracement at 1325 backed by 1339. Ultimately a breach above the 2016 high-day close at 1355 would be needed to mark resumption of the broader uptrend.

What are the traits of a Successful Trader? Find out with our Free eBook!

Gold 240min Price Chart

Gold Prices Buoyed by Trump Tariff Talks- Is a Bottom In Place?

A closer look at gold sees prices rebounding off the median-line of this descending pitchfork formation we’ve been tracking since last week. A breach above resistance here looks for a stretch into the upper parallel / 50% retracement at 1332- a close above this level would be needed to suggest a near-term low is in place with such a scenario targeting a rally back towards 1339 and the 2017 high-day close at 1346.

Bottom line: Look to fade weakness early next week while above 1300 with a topside breach of this multi-week formation needed to fuel the next leg higher in Gold. A break below this support barrier would invalidate the reversal play and keep the focus lower towards subsequent support objectives at 1295 and the 61.8% retracement at 1286.

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Subscribe to his email distribution list.

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

DISCLOSURES

News & Analysis at your fingertips.