Gold Price News and Analysis
- Gold has lost 12.5% of its value in four months.
- Downtrend remains but room for a rally exists.
The DailyFX Q3 Gold Forecast is now available to help traders navigate the market.
Gold Price – Downtrend Remains in Place for Now
After breaking noted support yesterday at $1,205/oz. gold touched the March 2017 swing low at $1,195/oz. and is currently trading either side of this level. The sell-off and downtrend that started in April, is being fueled by a strong US dollar complex with higher interest rates pulling investors away from non-interest-bearing assets like gold. The commodity space as a whole is suffering from Chinese Yuan weakness against the US dollar, while the soaring USDTRY rate fuels fears of a contagion overspill from Turkey into other emerging markets.
The latest IG Retail Sentiment Indicatorshows that traders remain 88.2% net-long of the precious metal,a bearish contrarian sentiment indicator.
Gold Daily Price Chart (February 2017 – August 14, 2018)
Gold Price – Short-Term Rebound Likely
The one-hour gold chart gives bulls some short-term confidence with a low around $1,192/oz. holding for now. The precious metal currently sits on prior support at $1,195/oz. and the 20-day moving average with the next level of resistance around $1,204/oz. a confluence of the 50-day moving average, prior support and the 200-day moving average at just $1,207/oz. This level also remains below the downtrend seen on the daily chart which cuts across also around $1,207.0z. The RSI indicator has just moved out of oversold territory but remains weak.
If gold breaks back below the $1,192/oz. level and makes a fresh 18-month low, the technical picture changes and the price will likely fall again with $1,180/oz. firmly in view.
Gold Price One Hour Chart (August 8 – 14, 2018)
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--- Written by Nick Cawley, Analyst