Gold Price Further Gains Likely as US Dollar Wobbles
Gold Price, News and Chart:
- Gold’s decisive break adds fuel to the recent rally.
- US dollar testing long-term moving average support.
Gold on the March as the US Dollar Stumbles Lower
The price of Gold continues to press higher after the latest uptick took out multi-month resistance, leaving the precious metal at levels last seen in June 2018. Increased risk-off sentiment and a weakening US dollar is a heady combination for Gold and further gains look likely, unless Fed Chair Jerome Powell turns unexpectedly hawkish at his post-FOMC press conference on Wednesday. At the end of the week, the latest US non-farm payroll data may also weigh on USD. Levels to watch on the upside include, $1,309.55/oz. followed by $1,316.56/oz. and $1,32602/oz. before a full retrace back to $1,365.3/oz.
Gold Daily Price Chart (December 2017 – January 29, 2019)
Retail traders are 68.2% net-long Gold according to the latest IC Client Sentiment Data, a bearish contrarian indicator. Recent changes in daily and weekly sentiment suggest that the current spot Gold price has a mixed trading bias, despite traders remaining net-long.
The recent US Dollar sell-off is currently being restrained by the 200-day moving average and looks likely to move lower. All eyes will be on heavyweight US data releases this week and Wednesday’s FOMC meeting.
The US dollar index (DXY) not looks set to target the January 10 low at 94.50 before 94.30 and the September 2018 double-low at 93.35. Initial resistance at 95.37 (20-day ma) followed by 95.70 and then 95.93 (50-day ma). Moves however will be dictated bu events and data in the US and short-term price action may be choppy.
US Dollar Basket (DXY) Daily Price Chart (May 2018 – January 29, 2019)
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.