Gold Price Pressing Resistance, Chart Set-Up Remains Positive
Gold (XAU) Price, Analysis and Chart
- Gold’s technical set-up remains positive.
- US dollar remains strong despite looming US interest rate cut.
Q3 2019 Gold Forecast and Top Trading Opportunities
Gold Remains Pointed to The Upside
The technical set-up for gold remains positive and a re-test of last week’s multi-year high ($1,453/oz.) is expected in the short- to medium-term. A robust US dollar is currently weighing on the price of gold, despite an expected 0.25% Fed rate cut expected next week, the first of three cuts expected this year. A weaker US dollar - via lower interest rates – should see gold push higherand set new 2019 highs. Ongoing political tensions between the UK and Iran and the trade war between the US and China will also give the precious metal a bid, while any breakdown in equity valuations will push gold even higher.
The daily gold chart shows that the pennant formation was broken to the upside before the price moved lower. The uptrend line remains intact – currently around $1,411/oz. - and only a break and close below here will invalidate the short-term positive outlook for the precious metal. A break below here should see strong support at $1,400/oz. To the upside, $1,439/oz. before a re-test of $1,453/oz.
Gold Price Daily Chart (October 2018 – July 24, 2019)
IG Client Sentiment data show that 71.0% of retail traders are net-long of gold, a bearish contrarian indicator. However, recent daily and weekly positional changes give us a stronger bearish contrarian bias.
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