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
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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
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
GBP/USD
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
USD/JPY
Mixed
More View more
Real Time News
  • USD/MXN Price Forecast: A Risk of a Possible Reversal- USD vs Mexican Peso More details in the link below: https://www.dailyfx.com/forex/technical/article/special_report/2020/04/08/USDMXN-Price-Forecast-A-Risk-of-a-Possible-Reversal-USD-vs-Mexican-Peso-MK.html?CHID=9&QPID=917714 https://t.co/Q8bfVUbgnr
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.26% US 500: -0.43% Germany 30: -1.12% France 40: -1.71% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/hq1dYt2NIv
  • LIVE NOW! Strategist @PaulRobinsonFX discusses important technical developments relevant to short to intermediate-term commodity and equity index traders here - https://www.dailyfx.com/webinars/816147795?CHID=9&QPID=917720&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Psychologist & Trading Coach Brett Steenbarger,discusses his views on ✔️ Trading psychology ✔️ Identifying market tops and bottoms. ✔️ Technical analysis and market psychology relationship Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/Twr44cZ1GB https://t.co/WBmhA7EOHo
  • LIVE IN 30 MIN: Strategist @PaulRobinsonFX discusses important technical developments relevant to short to intermediate-term commodity and equity index traders here - https://www.dailyfx.com/webinars/816147795?CHID=9&QPID=917720&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Nigeria has made the conscious decision to shut down all its oil refineries
  • ECB's Kazaks says the ECB can expand and extend stimulus scheme if needed, adds that capital key deviation will be short-term and operational $EUR
  • Los #Coronabonos vuelven a dividir a Europa, $EURGBP en busca de dirección clara #eur #gbp #trading https://t.co/BVavtxXGr0
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT to gain insight on indices and commodities for the active trader. Register here: https://t.co/gghsFthzd5 https://t.co/hgCmGJqwtI
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1AO4XI https://t.co/39bskzYuvk
Gold Price Forecast: Monthly-High on Radar as RSI Clings to Bullish Trend

Gold Price Forecast: Monthly-High on Radar as RSI Clings to Bullish Trend

2018-12-17 20:30:00
David Song, Strategist
Share:

Gold Talking Points

Gold pares the weakness from the previous week as the Federal Reserve comes under increased pressure to keep the benchmark interest rate on hold, with prices for bullion eyeing the monthly-high ($1251) as the Relative Strength Index (RSI) clings to the bullish formation carried over from the previous month.

Image of daily change for major financial markets

Gold Price Forecast: Monthly-High on Radar as RSI Clings to Bullish Trend

Image of daily change for gold prices

There appears to be growing interest surrounding the Federal Open Market Committee (FOMC) interest rate decision on December 19 as White House trade adviser Peter Navarro argues that the central bank should sit on the sidelines ‘because the economy is growing without inflation,’ and there appears to be a shift in market expectations as Fed officials adopt a less-hawkish tone ahead of their last meeting for 2018.

Image of fed fund futures

Even though the FOMC appears to be on track to deliver a 25bp rate-hike later this week, Fed Fund Futures now show the central bank on hold throughout the first-half of near year, with the committee already expected to keep the benchmark interest rate at 2.25% to 2.50% in June 2019.

Recent remarks from Chairman Jerome Powell & Co. suggest the central will continue to drop the hawkish tone as household face subdued wage growth paired with cost-push inflation emerging from the shift in the U.S. trade policy, and it remains to be seen if Fed officials will continue to forecast a longer-run interest rate of 2.75% to 3.00% as ‘contacts in many Districts indicated that input costs had risen and that increased tariffs were raising costs.’ With that said, diminishing bets for an higher borrowing-costs may keep gold prices afloat, but sentiment surrounding bullion remains skewed as the retail crowd continues to bet on a larger correction.

Image of IG client sentiment for gold

The IG Client Sentiment Report shows 78.3% of traders are net-long gold compared 76.7% last week, with the ratio of traders long to short at 3.61 to 1. The number of traders net-long is 1.7% higher than yesterday and 0.8% higher from last week, while the number of traders net-short is 21.5% higher than yesterday and 7.0% lower from last week.

Despite signs of limited participation, the ongoing tilt in retail interest undermines the recent advance in bullion as it offers a contrarian view to crowd sentiment. However, the near-term outlook for gold remains supportive as the precious metal continues to track the upward trending channel from August, with the Relative Strength Index (RSI) clinging to the bullish formation from earlier this year, but a series of failed attempts to test the monthly-high ($1251) may generate a larger pullback as the bullish momentum appears to be abating. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

Gold Daily Chart

Image of gold daily chart
  • Keep in mind, break of the October-high ($1243) keeps the topside targets on the radar for gold, but need a close above the Fibonacci overlap around $1249 (50% retracement) to $1250 (38.2% retracement) region to open up the next topside hurdle around $1260 (23.6% expansion).
  • However, string of failed attempts to close above the stated region may spur a pullback, with the first area of interest coming around $1210 (50% retracement) to $1219 (61.8% retracement) followed by $1198 (38.2% expansion) area, which sits just above the November-low ($1196).
  • Keeping a close eye on the RSI as it retains the upward trend carried over from the previous month, but the bullish momentum appears to be abating as the oscillator struggles to break above 70 and push into overbought territory.

For more in-depth analysis, check out the Q4 Forecast for Gold

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other markets the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES

News & Analysis at your fingertips.