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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
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
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • https://t.co/fxVoqyhlWX
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Wall Street: 3.63% US 500: 2.91% FTSE 100: -0.09% France 40: -0.13% Germany 30: -0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/zy2JWPvCSe
  • 🙃 https://t.co/0WKkP8Q9j1
  • Trump Administartion to put out revisions to China flight restrictions - BBG
  • #Dollar Price Outlook: $USD Technical Breakdown at Yearly Open Support - $DXY Levels - https://t.co/ZjMeUwZjLw https://t.co/0pZfe8Cxt3
  • Trump says we will be announcing an incentive with taxes soon $SPX
  • U.S. New York Fed Staff Nowcast for Q2 at -25.5%, previously -35.5% $DXY $SPX
  • I expect leaders to be cheerleaders for their economies, but President Trump saying the US recovery is "better than a 'V' - it's a rocket ship" definitely raises the bar for me
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.97% 🇳🇿NZD: 0.64% 🇨🇦CAD: 0.56% 🇪🇺EUR: -0.23% 🇯🇵JPY: -0.56% 🇨🇭CHF: -0.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/lmPKxB1EzP
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: France 40: 3.08% Germany 30: 2.78% Wall Street: 2.77% US 500: 2.27% FTSE 100: 1.79% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/yQmQ8EWvTP
Gold Prices Pare Post-NFP Losses, RSI Clings to Bullish Formation

Gold Prices Pare Post-NFP Losses, RSI Clings to Bullish Formation

2019-01-07 19:00:00
David Song, Strategist
Share:

Gold Talking Points

Gold pares the weakness following the U.S. Non-Farm Payrolls (NFP) report amid waning bets for a Federal Reserve rate-hike, and the price for bullion may continue to catch a bid over the coming days as the Relative Strength Index (RSI) clings to the bullish formation carried over from November.

Image of daily change for major financial markets

Gold Prices Pare Post-NFP Losses, RSI Clings to Bullish Formation

Image of daily change for gold prices

The June-high ($1309) remains on the radar for gold as Federal Reserve Chairman Jerome Powell warns that the central bank is ‘always prepared to shift the stance of policy and to shift it significantly if necessary,’ and the comments suggest the Federal Open Market Committee (FOMC) is nearing the end of the hiking-cycle as officials lower their economic forecast for 2019.

Image of fed fund futures

Fed Fund Futures continue to show little expectations for higher U.S. interest rates, with the central bank anticipated to stay on hold throughout the first-half of the year, and a growing number of Fed officials may adopt a less-hawkish tone ahead of the next rate decision on January 30 as Chairman Powell & Co. ‘see growth moderating ahead.’ At the same time, theFOMC may come under pressure to slowdown the balance-sheet adjustment as the quantitative tightening (QT) drags on risk-taking behavior, but the weakening outlook for the world economy seems to be spurring a flight to safetyas global equity prices remain battered, while precious metals catch a bid.

In turn, gold should continue to benefit from the current environment amid diminishing bets for an higher U.S. interest rates,but the pickup in volatility appears to be spurring a change in retail sentiment as traders fade the recent strength in bullion.

Please add a description for the image.

The IG Client Sentiment Report shows 70.8% of traders are now net-long gold compared 73.7% last week, with the ratio of traders long to short at 2.42 to 1.The percentage of traders net-long is now its lowest since September 03 when gold traded near $1200.The number of traders net-long is 1.4% higher than yesterday and 0.2% higher from last week, while the number of traders net-short is 29.4% higher than yesterday and 11.3% higher from last week.

The near-term recovery in gold may fuel a broader shift in market behavior as the retail crowd responds by boosting their net-short exposure, and the recent developments keep the topside targets on the radar as both price and the Relative Strength Index (RSI) continue to track the bullish formations carried over from late-2018. 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
  • The near-term advance in gold appears to be stalling around the $1298 (23.6% retracement) to $1302 (50% retracement) region as the precious metal snaps the series of higher highs & lows from earlier this month, but the June-high ($1309) remains on the radar as the RSI attempts to push back into overbought territory.
  • Still need a break/close above $1298 (23.6% retracement) to $1302 (50% retracement) to open up the topside targets, with the next region of interest coming in around $1315 (23.6% retracement) followed by the $1328 (50% expansion) area.

For more in-depth analysis, check out the 1Q 2019 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 2019.

--- 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.