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
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
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
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCagF5 https://t.co/4DGXwA8vqs
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/mAMhWbV6Jy
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here.https://t.co/pb5E2KgRzW #DailyFXGuides https://t.co/E9ZmJvqO0z
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/fqxw1AoKc1
  • Gold snapped a two-week losing streak but keeps price within the broader August downtrend. These are the levels that matter on the $XAUUSD weekly chart. Get your market update from @MBForex here: https://t.co/B3Jct6mIBD https://t.co/xTGIM2hRBv
  • $GBPUSD continues to move higher, despite Friday’s weakness, as vaccination hopes continue to fuel positive sentiment despite ongoing lockdown fears and downbeat UK data. Get your market update from @nickcawley1 here: https://t.co/S8UoHzOwFN https://t.co/qI6UZdggvM
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/6wxX6oQurn
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/w009tJEQZn
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/2AeO1AdD2M
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/INJz4NSugQ
Gold Price Carves Lower Highs and Lows Amid Plans to Reopen US Economy

Gold Price Carves Lower Highs and Lows Amid Plans to Reopen US Economy

David Song, Strategist

Gold Price Talking Points

Gold continues to pull back from the yearly high ($1748) even though the International Monetary Fund (IMF) forecasts global growth to contract 3.0% in 2020, and the price for bullion may face a larger correction as it carves a series of lower highs and lows.

Gold Price Carves Lower Highs and Lows Amid Plans to Reopen US Economy

The price of gold fails to test the November 2012 high ($1754)as the Trump administration outlines a three-phased approach to reopen the US economy, and the bullish momentum may continue to abate over the coming days as the Relative Strength Index (RSI) reverses course ahead of overbought territory.

Hopes of a V-shaped recovery appear to be dampening the appeal of gold as St. Louis Fed President James Bullard insists that “it is entirely possible and feasible we can get past the crisis mostly in the second quarter,” and a growing number of Federal Reserve officials may adopt an improved outlook as the central bank takes unprecedented steps to combat the economic shock from COVID-19.

However, New York Fed President John Williams, a permanent voting-member on the Federal Open Market Committee (FOMC), warns of a protracted recovery as “it's going to take longer to get us back to where we want to be.” Mr. Williams went onto say that “I don't see the economy being back to full strength by the end of the yearduring an interview with CNBC, and the weakening outlook for growth may force the FOMC to retain a dovish forward guidance at its next interest rate decision on April 29 as the IMF sees the US economy contracting 5.9% in 2020.

It remains to be seen if the FOMC will continue to push monetary policy into uncharted territory as the committee “remainscommitted to using its full range of tools to support the flow of credit to households and businesses to counter the economic impact of the coronavirus pandemic,” but the unprecedented response may ultimately lead to unintended consequences as the Fed relies on its balance sheet to cushion the US economy.

With that said, the low interest rate environment may continue to act as a backstop for goldas marketparticipants look for an alternative to fiat-currencies, and the broader outlook for bullion remains constructive as the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) helped to rule out the threat of a Head-and-Shoulders formation, with a similar scenario arising in March as the price of gold reversed course from the monthly low ($1451).

However, the price of bullion may continue to pullback from the yearly high ($1748) as it initiates a series of lower highs and lows, while the Relative Strength Index (RSI) reverses course ahead of overbought territory.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

Gold Price Daily Chart

Image of gold price daily chart

Source: Trading View

  • The opening range for 2020 instilled a constructive outlook for the price of gold as the precious metal cleared the 2019 high ($1557), with the Relative Strength Index (RSI) pushing into overbought territory during the same period.
  • A similar scenario materialized in February, with the price of gold marking the monthly low ($1548) during the first full week, while the RSI broke out of the bearish formation from earlier this year to push back into overbought territory.
  • However, the monthly opening range for March as less relevant amid the pickup in volatility, with the decline from the monthly high ($1704) leading to a break of the January low ($1517).
  • Nevertheless, the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) instilled a constructive outlook for bullion especially as the RSI reversed course ahead of oversold territory and broke out of the bearish formation carried over from the previous month.
  • The break/close above $1710 (100% expansion) pushed the price of gold to a fresh yearly high ($1748), but the precious metal struggles to retain the advance from earlier this month following the failed the November 2012 high ($1754).
  • The Relative Strength Index (RSI) highlights similar dynamic as the oscillator fails to push above 70 and flops ahead of overbought territory.
  • The string of failed attempt to close above the Fibonacci overlap around $1733 (78.6% retracement) to $1739 (100% expansion) has pushed the price of gold back towards the $1676 (78.6% expansion) region, with the next area of interest coming in around $1655 (78.6% expansion).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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

DISCLOSURES