Gold Price Analysis: Short-Term Uptrend Under Threat
Gold Price, News and Analysis
- Recent rally looking vulnerable in the short-term.
- US dollar picks-up, weighing on the precious metal.
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Gold Needs to Stay Above $1,200/oz. to Rally Further
A pick-up in the US dollar, especially against the offshore Chinese Yuan, is weighing on gold and threatening to break its two-week uptrend. USDCNH is back around 6.8450, although it remains in a short-term downtrend, while the US dollar basket (DXY) trends higher in the short-term. DXY hit a one-month low of 94.00 on Tuesday and has crept back up to 94.25 but the move remains unconvincing and may yet re-test the recent low again.
On the daily chart, Gold trades just above the uptrend line and the 50-day moving average at $1,198, while an old swing-low from March 2017 enters the picture at $1,194/oz. Below here support should be found from the Friday August 24 candle’s low at $1,184/oz. To break higher the precious metal will have to take out 61.8% Fibonacci resistance at $1,215/oz and the 20-day moving average at $1,218/oz.
Gold Daily Price Chart (November 2017 – August 30, 2018)
The latest IG Retail Sentiment Indicatorshows that traders remain 81.6% net-long of the precious metal, normallya bearish contrarian sentiment indicator. However recent changes in client sentiment suggest that prices may soon reverse higher.
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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.