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
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
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
Wall Street
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
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
Bullish
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
More View more
Real Time News
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/afobcd9GRa https://t.co/bn3jPwlxks
  • Arizona virus cases rise 5.1% vs prior 4.7% 7-day average - BBG
  • The US Dollar is entering the third quarter with its safe haven status tested by rising COVID cases and trade pressures. What are the key USD catalysts in these opening weeks of July? Download the 3Q guide from @JohnKicklighter to find out here: https://t.co/z3dYpQYiJa https://t.co/Eh2Pd9YZq7
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.26% 🇦🇺AUD: 0.16% 🇪🇺EUR: 0.06% 🇯🇵JPY: 0.00% 🇬🇧GBP: -0.04% 🇨🇦CAD: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/xEQQA9wfDe
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: -0.37% Wall Street: -0.69% Germany 30: -0.84% France 40: -1.05% FTSE 100: -1.45% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/8qMWUcY2fh
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 0.43% Gold: -0.06% Oil - US Crude: -1.40% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/MinH2fctej
  • Emotions are often a key driving force behind #FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:https://t.co/eILWbFgHRE https://t.co/IbTMn2HriN
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.26%, while traders in US 500 are at opposite extremes with 70.45%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/GrWk4Ml9Ub
  • Commodities Update: As of 13:00, these are your best and worst performers based on the London trading schedule: Silver: 0.49% Gold: -0.01% Oil - US Crude: -1.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/SQBoLYpwhZ
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: US 500: -0.10% Wall Street: -0.13% Germany 30: -0.37% France 40: -0.68% FTSE 100: -1.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/kWeKL2dMyq
Gold Price Forecast: 2018-High on Radar Amid Overbought RSI Signal

Gold Price Forecast: 2018-High on Radar Amid Overbought RSI Signal

2019-02-20 16:30:00
David Song, Strategist
Share:

Gold Talking Points

Gold rallies to fresh yearly highs despite hopes of a U.S.-China Trade Deal, and recent price action brings the 2018-high ($1366) on the radar as the bullish momentum appears to be gathering pace.

Image of daily change for major financial markets

Gold Price Forecast: 2018-High on Radar Amid Overbought RSI Signal

Image of daily change for gold prices

The narrowing threat of a global trade war has done little to curb the price of bullion as the Federal Reserve abadons the hawkish forward-guidance, and gold may continue to catch a bid as a growing number of Fed officials endorse a wait-and-see approach for monetary policy.

In a recent interview with Reuters, New York Fed President John Williams, a permanent voting-member on the Federal Open Market Committee (FOMC), argued that there needs to ‘be a different outlook either for

growth or inflation’ for the central bank to implement higher interest rates, and went onto say that ‘monetary policy is where it should be’ amid the mixed data prints coming out of the U.S. economy.

Image of fed fund futures

The comments suggest the FOMC will stick to the sidelines for the foreseeable future as the central bank remains ‘data dependent,’ and Fed Fund Futures may continue to show Chairman Jerome Powell & Co. on hold throughout 2019 as ‘the case for raising rates has weakened somewhat.’ At the same time, it seems as though the Fed is on track to taper the $50B/month in quantitative tightening (QT) as Governor Lael Brainardindicates that the ‘balance-sheet normalization process probably should come to an end later this year,’ and the FOMC Minutes may continue to heighten the appeal of gold should the policy statement highlight a greater willingness to adopt a more accommodative stance.

With that said, a further adjustment in the Fed’s forward-guidance may fuel a larger advance over the coming days, with the 2018-high ($1366) on the radar as a bull-flag formation pans out. Moreover, recent developments in the Relative Strength Index (RSI) suggest the bullish momentum is gathering pace the oscillator extends the upward trend from late-2018 and pushes into overbought territory. 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 broader outlook for gold remains constructive as both price and the Relative Strength Index (RSI) track the bullish trends from late-2018, while the former-resistance zone around $1298 (23.6% retracement) to $1302 (50% retracement) offers support.
  • The break/close above $1340 (61.8% expansion) raises the risk for a run at the 2018-high ($1366), but gold has staged a string of failed attempts to close above the Fibonacci overlap around $1358 (23.6% expansion) to $1359 (61.8% expansion) back in 2018, with bullion at risk for a pullback should gold prices exhibit a similar reaction around the key resistance zone

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.