News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Fed's Bowman: - Continued monetary and targeted fiscal support may be needed - If virus worsens asset prices will be vulnerable to price drops - BBG
  • Secretary Mnuchin says he will meet with Senator McConnell today - BBG
  • EUR/USD is currently just holding onto 1.1700 as US dollar strength and Euro weakness combine to keep downward pressure on the pair. Get your $EURUSD market update from @nickcawley1 here: https://t.co/u38O9owdB0 https://t.co/BgVq604gBl
  • US Treasury Secretary Steve Mnuchin showed up for follow up stimulus talks with House Speaker Pelosi's team. I remain highly dubious they will hash out this necessary stimulus follow up soon. With the recent layoff announcements, the need is becoming more obvious
  • #Sterling Outlook: Pound Rebound to be Short Lived- $GBPUSD Levels - https://t.co/OMEc8v2XsI https://t.co/bvH498fiHy
  • Fed's Kaplan says rates need to be at zero for next 2.5 to 3 years - CNBC
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.18%, while traders in Wall Street are at opposite extremes with 66.72%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/PqDUdLtggr
  • #Gold prices have struggled through September after being one of the best performing assets since global financial markets bottomed out in March. Get your $XAUUSD market update from @CVecchioFX here: https://t.co/9neyikUiP7 https://t.co/IvfwtWGGZg
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.80% Gold: -0.13% Silver: -1.58% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/z0qHXFaTUg
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.49% 🇨🇦CAD: 0.47% 🇬🇧GBP: 0.39% 🇯🇵JPY: 0.07% 🇨🇭CHF: -0.12% 🇪🇺EUR: -0.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/pLN0iIfs3q
Gold Price Forecast: Precious Metals Primed for Next Breakout?

Gold Price Forecast: Precious Metals Primed for Next Breakout?

2020-08-28 17:50:00
Rich Dvorak, Analyst
Share:

GOLD PRICE OUTLOOK: PRECIOUS METAL PULLBACK EYES NEXT LEG HIGHER

  • Gold gained 1.5% this past week on net after finding support around the $1,910-price level
  • Gold price action looks on the cusp of a breakout from its recent consolidation pattern
  • Precious metals like gold and silver could snap higher following the shakeout of weak hands

Gold prices have fluctuated aggressively over recent trading sessions. The precious metal succumbed to powerful selling pressure earlier this month, sending gold price action on a 10% drop from its all-time high on 06 August, but the move looks more like a healthy correction rather than a reversal of the broader bullish trend.

Gold BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -6% 6% -4%
Weekly -3% -1% -3%
What does it mean for price action?
Get My Guide

GOLD PRICE CHART: DAILY TIME FRAME (13 MAY TO 28 AUG 2020)

Gold Price Forecast: Precious Metals Primed for Next Breakout?

Chart created by @RichDvorakFX with TradingView

A breakdown below the 50-day moving average, however, might indicate gold bulls have capitulated. That said, after building a base of technical support around the $1,910-level over the last two weeks, gold prices look like they have potential to rebound back higher.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Rich Dvorak
Traits of Successful Traders
Get My Guide

Perhaps a topside breakout from the symmetrical triangle consolidation pattern could provide confirmation of this. Nonetheless, the $2,025-price level and pivot point from last week’s swing high present two obstacles that could prevent gold from recoiling back toward its record close.

GOLD PRICE CHART: DAILY TIME FRAME (27 MAR TO 28 AUG 2020)

Gold Price Forecast: Precious Metals Primed for Next Breakout?

Chart created by @RichDvorakFX with TradingView

Still, even in spite of rising interest rates, the ‘path of least resistance’ for gold price action going forward seems skewed to the upside. This is on the coattails of average inflation targeting just announced by the Federal Reserve. Broadly speaking, alterations made to the Fed policy framework look to weigh positively on inflation expectations and pressure real yields even lower.

Top Trading Opportunities in 2020
Top Trading Opportunities in 2020
Recommended by Rich Dvorak
Get Your Free Top Trading Opportunities Forecast
Get My Guide

Downside risk stemming from a material flareup in expected stock market volatility could create headwinds for gold prices, however, and if materialized, potentially eat away at the precious metal’s roughly 30% year-to-date gain. Though it is worth mentioning that the gold to S&P 500 VIX Index correlation has turned considerably less negative throughout August.

Keep Reading: Gold Price Forecast Bright & Volatile as USD, Real Yields Swing

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES