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. See our updated Privacy Policy here.

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
GBP/USD
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 USD could still rally a bit from here, but has resistance not far ahead that it will need to overcome if it is to extend to a larger degree. Get your weekly $USD technical forecast from @PaulRobinsonFX here: https://t.co/n0CVWWOJDe https://t.co/0uLjsQ2gwM
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/nfiFAlyYXv
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0unrdT https://t.co/mIsVJ4zTbB
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/hymrumanUY
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfs2Iz https://t.co/6dAqxsVfxJ
  • The results of this weekend’s German Federal Election will likely dominate Euro sentiment at the start of the week ahead but after a possible EUR/USD bounce they will have little long-term impact. Get your weekly $EUR forecast from @MartinSEssex here: https://t.co/Xu3ZT7EtrW https://t.co/5VHKn52MaA
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHq4Np https://t.co/mf9rsmIvaW
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/mYWO0Eta0P
  • Sterling continues to contract into trend extremes and the focus is on a pending breakout in the weeks ahead. Get your weekly $GBP technical forecast from @MBForex here: https://t.co/ZvEMQuFjSs https://t.co/rMmq9cehnY
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/tm4k3IVzHr
Gold Price Forecast: Four-Day Rally Stalls Ahead of 50-Day SMA

Gold Price Forecast: Four-Day Rally Stalls Ahead of 50-Day SMA

David Song, Strategist

Gold Price Talking Points

The price of gold appears to be reversing ahead of the 50-Day SMA ($1800) as it pulls back from a fresh weekly high ($1796), and lack of momentum to climb back above the moving average may undermine the recent recovery in the precious metal as a ‘death cross’ takes shape in August.

Advertisement

Gold Price Forecast: Four-Day Rally Stalls Ahead of 50-Day SMA

Bullion snaps a four-day rally even as a textbook buy signal emerged in the Relative Strength Index (RSI), and the price of gold may struggle to retain the recent series of higher highs and lows is it seems to be moving to the beat of its own drum.

The price of gold shows a limited reaction to the weaker-than-expected US Retail Sales report even as a growing number of Federal Reserve officials indicate a greater willingness to shift gears, and its seems as though the Federal Open Market Committee (FOMC) will alter the forward guidance as Boston Fed President Eric Rosengren reveals that “if we get another strong labor market report, I think that I would be support of announcing in September that we are ready to start the taper program.”

During an interview with CNBC, Rosengren, a FOMC voting-member in 2022, argues that he has “no concerns” about achieving the dual mandate for monetary policy, with the official going onto say that the quantitative easing (QE) program “is not nearly as effective now as it was, as we were coming out of the financial crisis.”

As a result, Rosengren insists that the FOMC should taper its asset-purchases “sooner rather than later,” and speculation for a looming shift in monetary policy may undermine the recent recovery in the price of gold as a ‘death cross’ takes shape in August.

With that said, the rebound from the monthly low ($1682) may turn out to be a correction in the broader trend rather than a change in market behavior as the 50-Day ($1800) and 200-Day ($1812) SMAs reflect a negative slope, and lack of momentum to push above the moving averages instills a bearish outlook ahead of the Kansas City Fed Economic Symposium scheduled for August 26 – 28 as Fed officials show a greater willingness to switch gears.

Gold Price Daily Chart

Image of Gold price daily chart

Source: Trading View

  • Keep in mind, a double-bottom emerged in March as the price of gold failed to test the June 2020 low ($1671), with the key reversal pattern pushing the precious metal back above the 200-Day SMA ($1812) for the first time since February.
  • At the same time, the Relative Strength Index (RSI) pushed into overbought territory for the first time since July 2020 as the price of gold appeared to be on track to test the January high ($1959), but the double-bottom formation seems to have run its course as the RSI no longer tracks the upward trend from earlier this year.
  • The negative slopes in both the 50-Day SMA ($1800) and 200-Day ($1812) SMAs indicate that the broader trend for bullion remains tilted to the downside, with a ‘death cross’ formation taking shape in August as the RSI pushed into oversold territory.
  • However, lack of momentum to test the March low ($1677) has generated a textbook buy signal in the RSI as the oscillator climbs back above 30, with the move above the $1786 (38.2% expansion) region pushing the price of gold towards the 50-Day ($1800).
  • A move above the moving average opens up the $1816 (61.8% expansion) to $1822 (50% expansion) region, which lines up with the 200-Day SMA ($1812), with the net area of interest coming in around $1837 (38.2% retracement) to $1847 (100% expansion).
  • However, lack of momentum to push above the 50-Day SMA ($1800) may push the price of gold back towards the Fibonacci overlap around $1743 (23.6% expansion) to $1763 (50% retracement), with the next area of interest coming in around $1690 (61.8% retracement) to $1695 (61.8% expansion).

--- 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