Gold Price, News and Analysis
- US dollar weakens on inflation misses.
- Gold needs to break Fibonacci retracement to be able to move higher.
The DailyFX Q3 Gold Forecast is now available to help traders navigate the market.
Gold’s Stuck Below Resistance – Higher Lows May Help
The precious metal continues to nudge higher but is finding technical resistance difficult to breach despite a helping hand from a weak US dollar complex. The greenback is nearing multi-week lows after recent PPI and CPI prints both missed expectations, while the haven bid from ongoing trade talks has also faded a touch in the last couple of days. This has helped gold make four higher-lows in a row and pushed the precious metal in between the 20-day and 50-day moving average, giving gold positive momentum.
Higher prices however are currently blocked by the 61.8% Fibonacci retracement level of the December 2016 – April 2018 rally - at $1,215.4/oz. Gold rejected this level on August 28 and September 13 but recent momentum may see another, and this time successful, attempt shortly. A break and close above would leave $1,236/oz. - $1,244.5/oz. the next target zone. On the downside, $1,204/oz. and $1,195/oz. should provide robust support.
Gold Daily Price Chart (January - September 14, 2018)
The latest IG Retail Sentiment Indicatorshows that traders remain 86.0% net-long of the precious metal,a bearish contrarian sentiment indicator. In addition, the latest CFTC Commitment of Traders report show that large US dollar bullish bets remain intact – gold negative – while large speculators are still running a substantial net-short gold position.
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--- Written by Nick Cawley, Analyst