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Gold Price Knocked Lower as the US Dollar Firms

Gold Price Knocked Lower as the US Dollar Firms

Nick Cawley, Senior Strategist

Gold Prices, News and Analysis

  • Spot gold weighed on by US dollar strength.
  • Retail remain long of gold and data suggests a pick-up in price.

The brand new DailyFX Q4 Gold Forecast is now available to help traders navigate the market.

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Gold Finds it Difficult to Push Higher

Gold trades the best part of 0.5% lower Friday as the US dollar came back to life and hit a new one-week high after Thursday’s Thanksgiving slumber. The precious metal is giving back this week’s gains and trades just above the 20- and 50-day moving averages at $1,221/oz. and $1,216.4/oz. respectively which may provide short-term support.

Gold Daily Price Chart (March – November 23, 2018)

Gold Positioning: Retail Remain Long

Retail investors remain long of gold (81.4%), according to the latest IG Client Sentiment Report, usually seen as a bearish contrarian set-up. Recent daily and weekly positional changes however suggest that the price of gold may soon reverse higher.

US Dollar Ignores Fed Talk

The US dollar basket (DXY) is trading in positive territory again and shrugging off recent Fed talk that dampened expectations of 3-4 interest rate hikes in 2019. A 0.25% hike at the December meeting is still expected although the market is not as confident as it once was. The DXY is being aided by a weak Euro, after growth expectations for the single-bloc came under the spotlight, while Sterling slips as Brexit continues to dominate.

US Dollar Basket (DXY) Daily Price Chart (March – November 23, 2018)

We are interested in your opinion and trading strategies for Gold. You canshare 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 nicholas.cawley@ig.com 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.

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