Skip to Content
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.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
XAU/USD Forecast: Technical Factors Drive Gold Bulls to 1850

XAU/USD Forecast: Technical Factors Drive Gold Bulls to 1850

What's on this page

GOLD OUTLOOK & ANALYSIS

  • Technical buying steering XAU/USD.
  • U.S. manufacturing PMI in focus today ahead of FOMC.
  • Rising wedge still a factor – candle close key.
Gold Forecast
Gold Forecast
Recommended by Warren Venketas
Get Your Free Gold Forecast
Get My Guide

XAU/USD FUNDAMENTAL BACKDROP

Gold is starting 2023 on the front foot after a significant rally stemming from what seems to be technical dynamics. Considering the U.S. dollar is also in the green this morning (traditionally an inverse relationship between the two), as well as no changes to inflation influences nor economic uncertainty, the move can only be attributed to technical buying. It is unclear if markets are looking through the recent Fed guidance around sustained aggressive monetary policy but if tomorrow’s FOMC minutes reiterate this stance, XAU/USD could slide back below 1830.00 once more.

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

Looking ahead, the only data point of real significance today will come via the U.S. manufacturing PMI release for December. However, being a primarily services driven economy, the manufacturing read is unlikely to stir major price action on gold.

ECONOMIC CALENDAR

image1.png

Source: DailyFX Economic Calendar

TECHNICAL ANALYSIS

Introduction to Technical Analysis

Candlestick Patterns

Recommended by Warren Venketas

Start Course

GOLD PRICE DAILY CHART

image2.png

Chart prepared by Warren Venketas, IG

The daily spot gold chart shows today’s daily candle 1.22% higher at the start of the European session with the 1850.00 psychological level already pierced. This does not rule out the developing rising wedge chart pattern (black) just yet but a daily candle close above wedge resistance and 1850.00 could spur another leg higher towards the 1879.45 swing high.

On the contrary, a close below wedge resistance may garner support from bears back below 1830.00. The Relative Strength Index (RSI) could be supportive of this outlook currently exhibiting bearish/negative divergence from gold prices.

Resistance levels:

  • 1879.45
  • 1850.00

Support levels:

  • 1830.00
  • 1824.47
  • 1800.00

IG CLIENT SENTIMENT: BULLISH

IGCS shows retail traders are currently distinctly LONG on gold, with 65% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment however, due to recent changes in long and short positioning we arrive at a short-term upside bias.

Contact and followWarrenon Twitter:@WVenketas

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

DISCLOSURES