Gold Price Forecast: XAU/USD Hits 6-Week High, Overbought Signal Flashes
Gold Price Forecast, Technical Analysis and Charts:
Gold Price Analysis
Gold continues to float higher as traders look to de-risk as the holiday season starts. The fundamental backdrop for the precious metal is fairly neutral with Monday’s weaker-than-expected US durable goods release helping prop up the price, while a strong US dollar complex – boosted by year-end demand - keeps the lid on any further rally. The partial trade deal between the US and China should also weigh on prices, especially after China announced temporary cuts to a range of tariffs on US goods from the beginning of 2020. However, gold continues to move higher.
The daily gold chart shows that the precious metal is back in a congested trading zone with an array of old highs and lows made over the last four months. The current price is supported by all three moving averages – with gold opening above the 20- and 50-dmas this week – while the downtrend off the September high has been broken this week. The series of lower highs remain in place until a break above the $1,51/oz. to 41,518/oz is broken convincingly.
One technical indicator – CCI – is warning that the market is looking toppy and is flashing its most overbought reading since early-mid August. With the market closing for the holiday season, it may be wise to wait until this reading drops, and turnover increases, before considering entering the market from the long side.
The DailyFX Q1 2020 Gold fundamental and technical outlooks will be released shortly on the DailyFX website to help guide traders in the first three months of next year.
Gold Price Chart (March -December 24, 2019)
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