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  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here:
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk.
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:
Gold Price - Looking For a Reason to Range Break as Volatility Wanes

Gold Price - Looking For a Reason to Range Break as Volatility Wanes

Nick Cawley, Strategist

Gold (XAU/USD) Analysis, Price and Chart

  • Gold confined in a narrowing trading range.
  • Volatility on the wane.
  • Retail traders remain heavily long of the precious metal.

Gold has had a quiet few days of late with price action contained within a short- to medium-term trading range. The precious metal needs a fundamental driver to break this range and with the US presidential elections on the horizon, a breakout may soon happen. The direction of the break is slightly harder to work out, although the current weakness of the US dollar is underpinning the price of gold, along with a jittery equity space, as Q3 earnings start to reveal the full impact of the coronavirus on various sectors. In addition, the record spread of the coronavirus in the US, Russia, and parts of Europe will add to the risk-off tone in the market.

The technical picture is slightly more cloudy with medium-term lower highs converging with short-term higher lows, indicating a break is near. Two moving averages seem to be capping upside movement this week with the 20-day simple moving average holding sway around $1,905/oz. followed by the 50-dma at $1,915.5/oz. Above here, the next level of resistance is the 23.6% Fibonacci retracement at $1,928/oz. Initial support for gold is between $1,890/oz. and $1,880/oz.

Gold Daily Price Chart (March – October 27, 2020)

Gold Price - Looking For a Reason to Range Break as Volatility Wanes

IG retail trader datashow 79.89% of traders are net-long with the ratio of traders long to short at 3.97 to 1, a contrarian bearish signal. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price may soon reverse higher despite the fact traders remain net-long.

Gold Price - Looking For a Reason to Range Break as Volatility Wanes

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

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