Gold Price Forecast: Shine on you crazy diamond
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UNLOCK OFFERXAU/USD Current price: $1,812.70
- The broad dollar’s weakness is keeping spot gold afloat.
- Gold’s safe-haven condition has somehow changed with the pandemic.
- XAU/USD neutral-to-bullish in the near term, strong resistance around 1,825.10.
Spot gold has offered little to traders this week, currently trading at around $1,812 a troy ounce, unchanged on a daily basis. The bright metal is meeting sellers around the 38.2% retracement of the April June rally at $1,825.10, unable to clear the area since mid-June. The bright metal had a wild slump in early August when demand for the greenback soared, but mixed signals on US Federal Reserve’s tapering have pushed the dollar lower and helped gold recover ground.
However, the bright metal lacks strength of its own. The advance is directly linked to the dollar’s weakness and surprisingly hardly related to risk sentiment. Gold is no longer an attractive safe-haven or somewhere to run when things heat up. The dollar has the doubtful honour of being the preferred haven in times of trouble, something that came along with the pandemic.
In this scenario, it seems unlikely that the bright metal has room for a long-term run, as, despite its current weakness, the dollar is far from collapsing and may soon resume its bullish stance.
XAU/USD short-term technical outlook
From a technical point of view, spot has the risk skewed to the upside, according to the daily chart. It is trading around a mildly bullish 100 SMA while above the 20 and 200 SMAs. Technical indicators lack directional strength but hold within positive levels. The 4-hour chart shows that the metal is currently stuck around a bullish 20 SMA, although technical indicators remain flat, reflecting the absence of buying interest.
Support levels: 1,808.60 1,797.00 1.787.55
Resistance levels: 1,825.10 1,831.60 1,839.20
XAU/USD Current price: $1,812.70
- The broad dollar’s weakness is keeping spot gold afloat.
- Gold’s safe-haven condition has somehow changed with the pandemic.
- XAU/USD neutral-to-bullish in the near term, strong resistance around 1,825.10.
Spot gold has offered little to traders this week, currently trading at around $1,812 a troy ounce, unchanged on a daily basis. The bright metal is meeting sellers around the 38.2% retracement of the April June rally at $1,825.10, unable to clear the area since mid-June. The bright metal had a wild slump in early August when demand for the greenback soared, but mixed signals on US Federal Reserve’s tapering have pushed the dollar lower and helped gold recover ground.
However, the bright metal lacks strength of its own. The advance is directly linked to the dollar’s weakness and surprisingly hardly related to risk sentiment. Gold is no longer an attractive safe-haven or somewhere to run when things heat up. The dollar has the doubtful honour of being the preferred haven in times of trouble, something that came along with the pandemic.
In this scenario, it seems unlikely that the bright metal has room for a long-term run, as, despite its current weakness, the dollar is far from collapsing and may soon resume its bullish stance.
XAU/USD short-term technical outlook
From a technical point of view, spot has the risk skewed to the upside, according to the daily chart. It is trading around a mildly bullish 100 SMA while above the 20 and 200 SMAs. Technical indicators lack directional strength but hold within positive levels. The 4-hour chart shows that the metal is currently stuck around a bullish 20 SMA, although technical indicators remain flat, reflecting the absence of buying interest.
Support levels: 1,808.60 1,797.00 1.787.55
Resistance levels: 1,825.10 1,831.60 1,839.20
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