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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.33% Gold: -0.69% Silver: -2.64% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/faJTbi16VK
  • AUD/USD now off daily lows, remains much weaker as a result of broad US Dollar strength $AUDUSD https://t.co/OkdKWbepAR
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.13%, while traders in GBP/JPY are at opposite extremes with 70.14%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/XXOjh5LmaB
  • Silver price action stalls between Moving Averages. Platinum prices currently confined by Fibonacci Support. Get your market update from @Tams707 here:https://t.co/Nbl8FDmfps https://t.co/VyuZzP8w2q
  • US Markets at the Close $NDX 12464.0 -1.73% $SPX 3768.49 -1.34% $DJI 30924.14 -1.11%
  • USD/JPY stronger during trade, now pushing towards 108 level $USDJPY https://t.co/GemouFGvHF
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.02% US 500: -0.03% Germany 30: -0.52% FTSE 100: -0.53% France 40: -0.71% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/jsQ36v1JJy
  • USD/CAD put in a test at the 1.2500 psychological level last week, but bulls following the falling wedge for topside breakouts may have to wait for a bit longer. Get your $USDCAD market update from @JStanleyFX here:https://t.co/81i2hiJT53 https://t.co/G0tuoC80CH
  • Gold continues its decline, now trading below $1,700 $XAUUSD https://t.co/PbAygJY9Yt
  • $USDJPY in full on bull mode longer-term, a really strong breakout from the falling wedge formation https://t.co/FDaE6Qzbfj https://t.co/23ubngiXnQ
Gold Price Forecast: Gold Breakout Takes a Breather – Where to Next?

Gold Price Forecast: Gold Breakout Takes a Breather – Where to Next?

Rich Dvorak, Analyst

GOLD PRICE FORECAST: GOLD RETREATS DESPITE STOCK MARKET SELLOFF, SPIKE IN VOLATILITY & PLUNGE IN YIELDS AMID GROWING CORONAVIRUS CONCERNS

  • Gold prices pull back from a seven-year high as the precious metal recharges before another potential move higher amid spiking volatility and plunging yields
  • Spot gold (XAU/USD) finds initial technical support around a key Fibonacci retracement level as concerns over the novel coronavirus outbreak continue to fester
  • Check out this Gold Forecast: Bullion Bid on Recession Risk, Inverted Yield Curve for detailed insight on fundamental drivers likely steering gold prices up

Gold has recorded a parabolic climb over the last several months and has pushed the precious metal to seven-year highs. Gold performance has not only glistened, but also outshines other asset classes like the US stock market.

Gold BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% -11% 0%
Weekly 3% -8% 1%
Learn how to use sentiment in your trading strategy
Get My Guide

For example, the 30% surge in spot gold prices compares to a much-less impressive 15% rally in the S&P 500 Index since the May 2019 lows printed by the commodity and equity benchmark.

CHART OF GOLD PRICE PERFORMANCE RELATIVE TO S&P 500 INDEX

Gold price chart gold forecast

Chart created by @RichDvorakFX with TradingView

Relative performance between stocks and gold so far this year is also quite notable. The S&P 500 Index is in the red by 3% while gold is up by 8% year-to-date.

The novel coronavirus outbreak in Wuhan, China earlier this year has rekindled recession odds and plagued market sentiment. This development largely explains the anti-risk move out of stocks and into safe-haven assets like gold.

CHART OF SPOT GOLD (XAU/USD), VOLATILITY (VIX) & TEN-YEAR TREASURY YIELD (US10Y, INVERTED)

Gold Price Chart Gold Forecast

Chart created by @RichDvorakFX with TradingView

Spot gold price action looks like it is taking a breather now considering the precious metal is lower on the day by about 0.5%. Catalysts for today’s modest dip are limited when taking the theme of widespread risk-aversion into account, which typically bolsters bullion.

The small pullback in spot gold prices today also seems peculiar in light of the spike in volatility and US Treasuries. There is generally a strong positive correlation between the price of gold, US Treasuries and volatility.

GOLD PRICE CHART TECHNICAL OUTLOOK

Gold Price Chart Gold Forecast

Chart created by @RichDvorakFX with TradingView

That said, the latest bit of downside in gold might be driven by healthy profit-taking and unwinding of long positions after the precious metal skyrocketed to its highest since January 2013 yesterday.

Gold prices appear to have found initial technical support around the $1,635 level and 23.6% Fibonacci retracement of the commodity’s most recent bullish leg. This area may have potential to keep bullion buoyed going forward before a retest of the $1,600 price level might be considered.

Building Confidence in Trading
Building Confidence in Trading
Recommended by Rich Dvorak
Building Confidence in Trading
Get My Guide

If near-side technical resistance can be topped around $1,660 however, gold prices might look poised to continue pressing higher toward the $1,700 handle before 2012 highs come into focus.

Learn More: Top Gold Trading Strategies & Tips

-- Written by Rich Dvorak, Junior 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