Gold Price Knocked Lower as the US Dollar Firms
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.
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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)
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--- Written by Nick Cawley, Analyst