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Gold Price Bottled-Up By Incoming US Data and Risk Barrage

Gold Price Bottled-Up By Incoming US Data and Risk Barrage

Nick Cawley, Senior Strategist

Gold Price (XAU/USD), Chart, and Analysis

  • FOMC and US data dominate the landscape.
  • Short-term trading range narrows.
  • Retail traders add to their long positions.
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Gold is trading in a very tight range since last Friday as traders and investors wait for a rush of heavyweight US economic data, the latest FOMC policy decision, and a deluge of US company earnings that may well set the risk trend for the coming days and weeks. Coming up today, the latest look at US consumer confidence, while in the equity space, Microsoft and Alphabet A+C report, three of the top 10 S&P 500 companies by weighting. Wednesday’s FOMC decision is the main event this week with the market pricing in a 75 basis point rate hike, and post-hike commentary will likely drive the next US dollar move.

For all market moving data releases and events, see the DailyFX Calendar

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The daily gold chart shows a restrictive range over the last 3-4 days with traders unwilling to force a move either way. The US dollar (DXY) looks to have found a short-term bottom just below 106.00, while the yield on the UST 10-year is steady around 2.80%. The current UST 2/10-year spread is also steady around 23bps. With little in the way of US dollar movement, and with equity markets looking at, and waiting for, the earnings calendar, gold is struggling to make a move.

The back-end of the week however should be more volatile with US inflation and growth readings released after the Fed decision, while in the equity market, Meta results are released after the market close, while on Thursday Apple, the largest company in the S&P 500 with a weighting of over 7% release their latest results.

It may be best for traders to sit on the sidelines and wait for the Fed decision before deciding their next move.

Gold Daily Price Chart – July 26, 2022

Retail trader data show 89.22% of traders are net-long with the ratio of traders long to short at 8.28 to 1. The number of traders net-long is 12.05% higher than yesterday and 13.02% higher from last week, while the number of traders net-short is 1.62% lower than yesterday and 3.90% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Gold-bearish contrarian trading bias.

Gold Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -2% -13% -5%
Weekly -14% 3% -10%
What does it mean for price action?
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What is your view on Gold – 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.

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