Gold Prices, News and Analysis
- Gold underpinned by a weak US dollar, but higher US interest rates are inevitable.
- US-Iran trade sanctions are ratcheting up risk.
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Gold Playing a Waiting Game
Gold continues to be buffeted by a combination of a strong US dollar and increased trade war fears after the US unveiled its latest sanctions on Iran Monday. US President Donald Trump unveiled a wide-range of sanctions, including shipping, oil and the financial sector. The risk-off sentiment has given the precious metal a healthy bid - gold currently trades around $1,232/oz. – but the upside remains capped by the strength of the US dollar with another 0.25% interest rate hike – the fourth this year - fully expected in December. Today’s US Midterm Elections are also likely to influence the precious metal and keep trade muted in the short-term, but risk and USD strength remain the market drivers.
The daily gold chart shows recent highs up to $1,243.5/oz. – and Fibonacci retracement at $1,244/oz. - acting as short-term resistance if gold breaks above $1,236.6/oz. After this the July 9 lower high at $1,266/oz. comes into play. On the downside, the 20-day moving average at $1,228.8/oz. guards $1,215.4/oz.
Gold Daily Price Chart (November 2017 - November 6, 2018)
Gold Positioning: Retail Remain Long
IG Retail Sentiment shows 79.4% of traders are net-long gold, a bearish contrarian indicator. However the combination of current sentiment and recent changes gives us a mixed Spot Gold trading bias.
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--- Written by Nick Cawley, Analyst