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Gold Prices (XAU/USD) Nudge Higher But Bigger Tests Lie Ahead

Gold Prices (XAU/USD) Nudge Higher But Bigger Tests Lie Ahead

Nick Cawley, Senior Strategist


What's on this page

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

  • Gold is treading water ahead of event and data risk.
  • The US bond market is closed, and the greenback is listless.

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The NYSE, Nasdaq, and the US bond markets are all closed Monday for US Presidents’ Day, leaving a range of markets hesitant of making a move. The US dollar and the US bond market, have been the main drivers of gold price action over the past months and with both of these markets effectively closed for the session, gold is likely to tread water for the next few hours.

The economic calendar does pick up tomorrow with the release of the latest FOMC minutes. After the last two weeks of near-constant hawkish Fed speak, it will be interesting to see if any voting members contemplated a 50 basis point rate hike at the February 1 meeting. The market is now pricing in 25 basis point rate hike at each of the next three FOMC meetings, taking the official rate to 5.25% to 5.5%. The market is also now pricing at a terminal rate of 5.285%. If the FOMC minutes show that there was support for a 50bp hike at the last meeting, these market expectations may move higher still, boosting bond yields and the US dollar and weighing on the price of gold.

Also this week, another look at US inflation – core PCE – and the latest US Q4 GDP update.


US bond yields ended Friday a fraction off their daily lows, leaving the US dollar marginally weaker going into the weekend. With little news so far today, and with risk sentiment neutral, this marginal dollar weakness has allowed gold to push a touch higher. The bigger picture is that the precious metal remains in a short-term downtrend and a further test of Friday’s $1,818/oz. multi-week low cannot be ruled out. Below here, $1,808/oz. comes into view ahead of $1,800/oz. The short-dated 20-dma offers initial resistance at $1.862/oz. ahead of the 23.6% Fibonacci retracement at $1,878/oz.

Gold Price Chart – Daily Chart – February 20, 2023


All Charts via TradingView

Gold Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 8% -10% 4%
Weekly 27% -22% 14%
What does it mean for price action?
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Retail Trader Flows are Mixed

Retail trader data show 66.65% of traders are net-long with the ratio of traders long to short at 2.00 to 1.The number of traders net-long is 3.82% higher than yesterday and 1.39% lower from last week, while the number of traders net-short is 12.04% higher than yesterday and 14.78% 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. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias.

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.