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. See our updated Privacy Policy here.

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
Mixed
Oil - US Crude
Bullish
Wall Street
Mixed
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
Mixed
USD/JPY
Mixed
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
More View more
Real Time News
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/Q0yRRpMpPX
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/pSeSiNnmHe
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/iVOEuK40rn
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/ltEO5dpKux
  • WTI crude oil is currently trading up against major resistance via the 2019 and 2020 highs within the confines of a channel; something has to give. Get your market update from @PaulRobinsonFX here: https://t.co/MO9foRjm2y https://t.co/YhBFdvZDEb
  • The Dow Jones and S&P 500 outlook appears bleak in the near term as retail traders increase their upside exposure. At the same time, these indices confirmed bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/fKCHELbOxo https://t.co/eVDwmFTaIg
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/8B8hqHahm1
  • The US Dollar finished off an eventful week after CPI and retail sales injected volatility into markets. FOMC is now in the Greenback’s sights as taper talks linger. Get your market update from @FxWestwater here: https://t.co/MHi0lfQ93j https://t.co/4XetwYAaNd
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/ZZRLV0Wkea
  • The Nasdaq 100 index has likely formed a bearish Gartley pattern, which hints at further downside potential. Negative MACD divergence on the weekly chart suggests that upward momentum may be fading. Get your market update from @margaretyjy here: https://t.co/GkMEkVA7YR https://t.co/E1vyCMVt6K
Weekly Fundamental Gold Price Forecast: Tailwinds Remains Strong

Weekly Fundamental Gold Price Forecast: Tailwinds Remains Strong

Christopher Vecchio, CFA, Senior Strategist
Weekly Fundamental Gold Price Forecast: Tailwinds Remains Strong

Weekly Fundamental Gold Price Forecast: Bullish

  • Gold prices may be entering a favorable period, with volatility studies pointing to increasing uncertainty in financial markets through the end of the year.
  • The last full week of September yields a lighter economic calendar, with only six ‘high’ rated events on the DailyFX Economic Calendar. Gold price’s primary driver will likely remain developments surrounding real yields.
  • The IG Client Sentiment Indexsuggests that gold prices in USD-terms (XAU/USD) may gain in the coming days.

Gold Prices Week in Review

Gold prices had a mixed week, splitting gains and losses among the major developed currencies covered by DailyFX Research. Gold prices in USD-terms (XAU/USD) added +0.54% while gold in EUR-terms (XAU/EUR) gained +0.57%. Similarly, gold in CAD-terms (XAU/CAD) rallied by +0.73%. Elsewhere, gold prices dropped: gold in GBP-terms (XAU/GBP, -0.43%); gold in NZD-terms (XAU/NZD, -0.35%); and gold in JPY-terms (XAU/JPY, -0.99%).

Top FX Events in Week Ahead

The last full week of September yields a lighter economic calendar, with only six ‘high’ rated events on the DailyFX Economic Calendar.

- On Monday and Tuesday, there are no ‘high’ rated events on the calendar.

- On Wednesday, gold in NZD-terms (XAU/NZD) comes into focus with the Reserve Bank of New Zealand’s September policy meeting; gold in EUR-terms (XAU/EUR) will likewise be of interest, with the October German GfK Confidence index; and gold in USD-terms (XAU/USD) will likely see volatility, with the release of the September Markit Manufacturing US PMI Flash estimate.

- On Thursday, gold in EUR-terms (XAU/EUR) will come into focus, with the September German Ifo Business Climate index.

- On Friday, gold in USD-terms (XAU/USD) will be of interest, with the release of the August US Durable Goods Orders report.

Real Yields Remain Gold’s Motivating Factor

Even as the gold price rally has paused, it remains the case that gold prices still have both fundamental and technical tailwinds at their back. Thanks to expansionary monetary policy and thus far underwhelming fiscal policy responses, mixed with the global economic uncertainty brought about by the coronavirus pandemic, real yields continue to fall and remain depressed. An environment defined by depressed and/or negative real yields has historically proven bullish for precious metals.

Gold Volatility Pulls Back, Gold Prices Shrug

Gold prices have a relationship with volatility unlike other asset classes. While other asset classes like bonds and stocks don’t like increased volatility signaling greater uncertainty around cash flows, dividends, coupon payments, etc.gold tends to benefit during periods of higher volatility. Heightened uncertainty in financial markets due to increasing macroeconomic tensions increases the safe haven appeal of gold.

Our longstanding axiom holds: “given the current environment, falling gold volatility is not necessarily a negative development for gold prices, whereas rising gold volatility has almost always proved bullish; in the same vein, gold volatility simply trending sideways is more positive than negative for gold prices.”

Gold Price (XAU/USD) Technical Analysis: Daily Chart (September 2019 to September 2020) (Chart 1)

Weekly Fundamental Gold Price Forecast: Tailwinds Remains Strong

The sideways move in gold prices over the past several weeks – since the first week of August – has seen the uptrend from the March and June 2020 lows (the coronavirus pandemic trendline) break. But the triangles remain in place, which in context of the prevailing trend – to the upside – necessitates an open mind for further continuation higher. Below 1901.65, bears may gain control; above 2015.73, bulls may gain control; in between, traders may want to exercise patience and wait for a clearer directional move.

GOLD PRICE VERSUS COT NET NON-COMMERCIAL POSITIONING: DAILY TIMEFRAME (SEPTEMBER 2019 TO SEPTEMBER 2020) (CHART 2)

Weekly Fundamental Gold Price Forecast: Tailwinds Remains Strong

Next, looking at positioning, according to the CFTC’s COT data for the week ended September 15, speculators increased their net-long gold futures positions to 240K contracts, up from the 236.5K net-long contracts held in the week prior. This marks the third weekly gain in a row in net-long positioning. The gold futures market is far from saturated: the all-time high for net-long contracts came during the week of February 18, 2020, when 353.6K were held. The lack of significant long positioning in the futures market may prove to be a tailwind for bulls.

IG CLIENT SENTIMENT INDEX: GOLD PRICE FORECAST (SEPTEMBER 18, 2020) (CHART 3)

Weekly Fundamental Gold Price Forecast: Tailwinds Remains Strong

Gold: Retail trader data shows 78.25% of traders are net-long with the ratio of traders long to short at 3.60 to 1. The number of traders net-long is 3.77% lower than yesterday and 1.45% lower from last week, while the number of traders net-short is 8.20% higher than yesterday and 1.77% higher 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.

Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

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

DISCLOSURES