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Gold Price Analysis: Downtrend in Control, Retail Heavily Long

Gold Price Analysis: Downtrend in Control, Retail Heavily Long

Nick Cawley, Senior Strategist


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Gold Price News and Analysis

  • December 12 low at $1,236.5/oz. the bears target.
  • Customers remain long as prices fall.

The DailyFX Q3 Gold Forecast is now available to help traders navigate the market.

The latest IG Retail Sentiment Indicator shows that traders are 88.9% net-long of the precious metal.

Gold Price Analysis – Trying to Break the Downtrend

Gold continues to battle with this year’s downtrend and has bounced three times in the last couple of weeks at an important support level made in December 2017. And a fourth attempt is likely on the cards if Fed Chair Jerome Powell gives the US economy a thumbs-up at this afternoon’s testimony to the Senate Banking Committee. With short-dated US Treasury yields hitting a near-decade high and with the market seemingly shrugging off political risk for now, gold’s allure continues to fade. This would spell further trouble for retail gold traders who continue to remain heavily long the precious metal, despite lower prices.

The precious metal could come back into favor if Fed Chair Powell’s testimony disappoints or if US President Donald Trump further inflames trade tensions across the globe. In the past few weeks however, gold has seemingly lost its favored status as the safe-haven of choice to CHF and JPY due to higher US bond yields and raised inflation expectations.

Any short-term rally in gold is expected to find resistance at the 20-day moving average at $1,252/oz. ahead of the July 9 high at $1,266/oz. On the downside the December low at $1,236.6/oz. remains key ahead of the July 2017 low at $1,204.9. Further back, the Fibonacci retracement of the December 2016/January 2018 rally from $1,122.75 to $1,366.13, highlights 50% retracement at $1,244.45/oz.

Gold Spot Price Chart Daily Time Frame (October 2017 – July 17, 2018)

Are you new to Gold or FX trading or are you looking to improve your trading skill sets? We can help you along your journey with a comprehensive range of constantly updated guides and trading tools – they are all Free to Download Here.

What’s your opinion on Gold?Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at or via Twitter @nickcawley1.

--- Written by Nick Cawley, Analyst

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