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Gold Price, Silver Price Shakeout Has Not Changed Fundamental Background

Gold Price, Silver Price Shakeout Has Not Changed Fundamental Background

2019-09-06 08:20:00
Nick Cawley, Analyst
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Gold (XAU) Price, Silver (XAG) Price Analysis and Charts

  • Gold down but not out, ahead of NFP release
  • Silver slides 6.5% lower as sellers dominate price action.

Q3 2019 Gold Forecast and Top Trading Opportunities

Gold Looking to Regain Upside Momentum

The recent sharp sell-off in the commodity space sent gold back to levels lows seen two weeks ago as market risk sentiment turned positive. US ADP jobs data was much stronger than expected Thursday while recent commentary around the US-China trade deal also gave risk assets a boost. Ahead today, the latest US Labor report – estimates around 160k before Fed chair Powell speaks later in the session. This will be the last Fed speak before the blackout period ahead of the September 18 FOMC meeting.

While gold may be currently under pressure, it would not take too much to push prices higher again as the overall market backdrop – US-China trade fears, recession worries, lower US/global interest rates – remains the same. A look at the daily chart shows the CCI indicator selling off sharply and back at levels last seen in mid-May, as the market moves towards oversold territory, while there remains strong support between $1492/oz. and $1494/oz. In the short-term, gold will probably range trade before the US NFP report, but the fundamental background remains positive.

Live US NFP Data Coverage from 12:15 GMT - Webinar

Gold Price Daily Chart (February – September 6, 2019)

Gold Price, Silver Price Shakeout Has Not Changed Fundamental Background

IG Client Sentiment data show that 66.1% 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 trading bias.

How to Trade Gold: Top Gold Trading Strategies and Tips

Silver Nears Supportive Zone

Silver’s sharp sell-off over the last 24-hours is bringing a supportive zone between $17.79/oz. and $18.05/oz. into view. This area is likely to remain supportive and if it holds will provide a springboard for a move higher. As with gold, the positive backdrop has not changed and any sell-off back towards $18.00/oz. should be monitored carefully, with $17.52/oz. providing the next level of support.

The gold/silver ratio is currently 82.00.

Silver Daily Price Chart (February – September 6, 2019)

Gold Price, Silver Price Shakeout Has Not Changed Fundamental Background

How to Trade Silver: Top Trading Strategies

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on Gold and Silver – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.

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