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Gold Price Outlook: Fibonacci Resistance Tested, Holds For Now

Gold Price Outlook: Fibonacci Resistance Tested, Holds For Now

Nick Cawley, Senior Strategist
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Gold Price News and Analysis

  • Fibonacci resistance at $1,215.4/oz may not hold allowing the market to move higher.
  • Range compression highlights a break, either way, is imminent.

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

Gold Price – Technical Range Tightening and Break Likely

Gold continues to battle important support and resistance levels along the downtrend line started in April this year and a break is likely in the short-term. The daily chart shows support around $1,205/oz while the four-month downtrend currently sits around $1,212/oz. This range has compressed in the last 7 trading sessions and is likely to break with risk-reward favoring an upside breakout. Above the downtrend line, Fibonacci retracement at $1,215.4/oz. has come into play and gold has already briefly broken above here before retracing below. Gold bulls will need to see sustained trading and a close above $1,215.4/oz. to confirm the start of a short-term rally with the 20-day moving average at $1,220.5/oz. the first target ahead of the December 12 swing low at $1,236.6/oz. On the downside, support at $1,205/oz. remains strong and should hold, all things being equal.

Away from the charts, any cessation in global trade/currency wars will likely put downside pressure on gold while USDCNH should also be watched closely. This pair and gold have traded in lock-step since March and any further weakening of the offshore Chinese Yuan – currently at 6.8310 – will also add weight to a bearish move.

The latest IG Retail Sentiment Indicator shows that traders remain net-long of the precious metal (85.6%), a bearish contrarian sentiment indicator. However recent daily and weekly sentiment shifts suggest that gold may reverse higher.

Gold Daily Price Chart (February – August 9, 2018)

Are you new to Gold trading or are you looking to improve your trading skill sets? We have recently produced an in-depth primer on How to Trade Gold: Top Gold Trading Strategies and Tips.

We are interested in your opinion and trade ideas for Gold – You can share your thoughts, views or analysis 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.