Richard Perry
Independent Analyst
Gold
For a while now, we have been looking to use a near term correction on gold to be a medium term buying opportunity. After the 10% correction in the past week, the move appears to be settling down now. Subsequently, we believe that this run higher is likely to be getting back on track once more. The technicals are stabilising, with RSI around 50 and Stochastics also beginning to tick higher, although the MACD lines which are more of a medium term indicator, are still in retreat. The main caveat for us comes not from technicals, but of how the market would respond to a US fiscal support package. This is likely to cause some near term volatility again if/when announced. In its absence though, the gold bulls are starting to get going again. The hourly chart shows improvement through higher lows and higher highs in the past 48 hours. Following initial consideration of resistance at $1940/$1949, the market is looking to pull higher again, and to use this as a basis of support now. The hourly momentum indicators are no longer corrective and are at least taking a more neutral configuration. It means that support initially at $1920 but more importantly at $1906 is growing in importance now as a near term gauge. Yesterday’s high of $1965 is an initial barrier this morning, but a retest of 1980/$1984 (old consolidation resistance) could now be seen. We cannot ruled out another lurch lower on the announcement of a US fiscal support package, but it looks to be that this weakness is a chance to buy and the market is looking for medium term opportunities now.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.