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.

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
EUR/USD
Bullish
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
Oil - US Crude
Bearish
Wall Street
Mixed
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
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Breaking news

US House Speaker Nancy Pelosi announces no fiscal stimulus deal reached after failed talks Thursday evening

Real Time News
  • RT @FxWestwater: EU Stoxx 50 Forecast: Bears Ready to Drag Index Lower on Rising Virus Cases? - via @DailyFX https://www.dailyfx.com/forex/market_alert/2020/10/01/EU-Stoxx-50-Forecast-Bears-Ready-to-Drag-Index-Lower-on-Rising-Virus-Cases.html ht…
  • The New Zealand Dollar’s correction lower against the Japanese Yen and US Dollar may be at an end, as NZD remains constructively perched above key chart support. Get your $NZD market update from @DanielGMoss here:https://t.co/8GiKFTfrMP https://t.co/NbRPmU4ce2
  • S&P 500 Outlook: Stocks Flop, VIX Pops on Failed Stimulus Talks Link to Analysis via @DailyFX - https://www.dailyfx.com/forex/market_alert/2020/10/01/sp500-outlook-stocks-flop-vix-pops-on-failed-stimulus-talks.html $ES_F $SPX $SPY #Trading https://t.co/FDVzo9yV4X
  • Yesterday’s gains in the Euro had largely stemmed from month & quarter end rebalancing flows, which had been quite the contrary to various investment bank models touting USD buying. Get your $EURUSD market update from @JMcQueenFX here:https://t.co/zgvi24o4SR https://t.co/7qn4zTf6es
  • $EURUSD Daily Pivot Points: S3: 1.1497 S2: 1.157 S1: 1.1601 R1: 1.1673 R2: 1.1716 R3: 1.1789 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.48% 🇦🇺AUD: 0.28% 🇨🇭CHF: 0.25% 🇪🇺EUR: 0.21% 🇯🇵JPY: -0.06% 🇬🇧GBP: -0.29% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/7SFSKZGIXS
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.39% Gold: 1.04% Oil - US Crude: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/shTxKyCvb8
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.66%, while traders in US 500 are at opposite extremes with 65.68%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/rUjXP0dNLh
  • New York City Government Bonds downgraded from Aa1 to Aa2 by Moody's - BBG
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.16% Germany 30: 0.12% FTSE 100: 0.03% US 500: -0.01% Wall Street: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/xQ8olnfK5k
Gold Price Outlook Tied to Equity Performance, S&P500 Rebound

Gold Price Outlook Tied to Equity Performance, S&P500 Rebound

2018-10-27 22:00:00
Peter Hanks, Analyst
Share:
Please add a description for the image.

Fundamental Forecast for Gold:Mixed

  • The rout in US equities continues to spur safe haven demand for the precious metal
  • Equity volatility has shown little sign of abating so gold is poised to remain a beneficiary
  • Bearish RSI and sentiment data muddy the safe-haven asset’s outlook

Gold Price Rides on Equity Stability

Gold staged another formidable rally this week as US equities remained under pressure. The precious metal has enjoyed the attention of investors looking to hedge their portfolio which has resulted in a climb of roughly $50 in October. On a percentage basis, the gain translates to slightly over 4. Friday’s bounce prompted gold to reach a three-month high above $1240.

Gold Price Chart Daily, October 2017 - October 2018

Gold Price Outlook Tied to Equity Performance, S&P500 Rebound

Looking to learn how to trade gold? Check out our Gold Trading Guide.

With a continuous demand for gold in recent weeks, RSI has remained on the upper half of the range and nears overbought levels. Typically this is a bearish development but given the fundamental and technical landscape for equities, it could be argued a high RSI should be discounted somewhat. While it may be discounted, it should not be discarded and thus the high RSI should be a sign of caution for gold bulls.

To gain more insight to how we use sentiment to influence our trading, join us for our weekly Trading Sentiment webinar.

Similarly, IG’s client data reveals retail traders remain overwhelmingly net-long. Often used as a contrarian indicator, the large percentage of traders net-long provides another headwind for gold bulls and further complicates the outlook.

Gold Price Outlook Tied to Equity Performance, S&P500 Rebound

View how our clients are positioned on gold and other assets with IG Client Sentiment Data.

Retail trader data shows 82.2% of traders are net-long with the ratio of traders long to short at 4.63 to 1. The number of traders net-long is 6.8% lower than yesterday and 3.0% lower from last week, while the number of traders net-short is 5.1% higher than yesterday and 12.1% lower from last week.

View our Economic Calendar for central bank rate decisions and other important data releases.

Unlike the past two weeks, next week has a loaded economic calendar. The Bank of Japan and the Bank of England have their respective rate decisions while Canada, Mexico and the Eurozone are due to release Q3 GDP figures. The week also has a smorgasbord of other high and medium-importance events that will weigh on inflation, rate outlooks, equity performance and therefore gold’s performance.

Given the bullish leaning for gold from the equity rout but opposing signals from RSI and retail sentiment data, gold’s outlook is difficult to nail down. Coupled with an avalanche of economic data to be released next week, the forecast for gold is mixed.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact Peter on Twitter at @PeterHanksFX

Improve your gold trading knowledge with our regulargold forecastand guide to Traits of Successful Traders.And if you’re looking for more information on gold trading, you might be interested in learning about thegold-silver ratio.

Other Weekly Fundamental Forecast:

Japanese Yen Forecast - Yen Price May Rise, Look Past BoJ, Eye Vulnerable Stock Markets

Australian Dollar Forecast – Australian Dollar Might Get Some Respite If Inflation Holds Up

Oil Forecast – Crude Oil Set For Third Weekly Decline Chasing Stock Markets Lower

Canadian Dollar Forecast – USD/CAD Rate Threatens Bearish Trend Ahead of U.S. NFP Report

British Pound Forecast – Brexit, Budget and the Bank of England

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

DISCLOSURES