Gold Price Remains Stuck in a Downtrend
Gold Price News and Analysis
- Gold’s outlook remains negative as US yields inch higher.
- Little in the way of technical or fundamental drivers.
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The latest IG Retail Sentiment Indicatorshows that traders are 80.4% net-long of the precious metal and recent positional changes give us a stronger contrarian bearish bias.
Gold Price Respecting the Downtrend
Gold continues to drift lower, with the downtrend from the April 11 high still in control. Markets are opening the week with a mild risk-on tone as concerns over EU political unrest take a back seat for the time being. Italian and Spanish bond yields – an indicator of risk – are both drifting lower while US Treasury yields push higher ahead of next weeks expected 0.25% US interest rate hike. Friday’s strong US employment and wages growth continue to point to a strong US economy and potentially two further rate hikes this year, making a total of four or 1%. This week’s G7 meeting may deliver some volatility in the shape of trade war rhetoric.
The May 21 low at $1,282/oz. remains the target on the downside with last Friday’s low around $1,289/oz. the first level of support. On the upside a break and close above the downtrend channel around $1,298/oz. would open the way for the recent double tops around $1,308/oz.
Gold Spot Price Chart Daily Time Frame (December 2017 – June 4, 2018)
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.