The dollar was on the rise again first thing on Tuesday morning, continuing its positive start to the new month and quarter. However, it started to fall back as the session wore on and this helped to keep gold bid. At the time of wiring, the yellow precious metal was trading around $1196 per ounce and therefore printing new highs on the week. In addition to the dollar easing back a little, gold may have been supported further by the mild sell-off in the equity markets.

Italy concerns dominate agenda

Risk was off the menu earlier after the stock market rally – sparked by agreement of the new USMCA deal over the weekend – faded in New York trading yesterday. Investors’ focus returned to the other big trade dispute between China and the US, and to troubles in Italy. China has been a tough negotiator and a quick resolution in their dispute over trade looks unlikely in the near future, although Beijing’s decision recently to retaliate with lower tariff rates than had been originally planned was deemed to be a positive move. Meanwhile Italian concerns were again weighing on the euro this morning, before it bounced back by mid-day. Earlier, Italian government bond yields had climbed to their highest levels since 2014 amid concerns that the European Commission could reject the Italian budget as it is a relatively high deficit of 2.4% of their GDP.

EUR/USD’s potential false break could be positive news for gold

Raised Italian concerns forced the EUR/USD to break down and when it sliced through that 1.1530 pivotal level we mentioned yesterday, this led to further technical selling as a cluster of stop orders that were resting below there were tripped. But the decent recovery that took place immediately afterwards meant that it was perhaps a false breakdown. It is now important to watch today’s close - if the EUR/USD finishes the day below this level then we can expect to see further losses in the near term outlook, while a close back above 1.1530 would confirm that it was indeed a false breakdown, which would thus point to higher levels going forward. If the EUR/USD were to rebound, then this would be a positive outcome for buck-denominated gold.

Technical outlook: gold bulls licking their lips

The fact that gold has been able to hold its own above the 61.8% Fibonacci retracement and support at $1180 following last week’s sell-off is a very positive sign. However, gold still needs to break and hold above major resistance in the $1205-$1215 range before we can be confident that a low has been formed. For now, we are moderately bullish, awaiting further confirmation. It is a good sign that the triangle breakdown has failed, suggesting bears may have gotten trapped. That being said, if gold were to break below that $1180 support then all bets would be off as we will then a have a new lower low, which would thus signal the resumption of the trend of price making lower lows and lower highs.

Gold

Risk Warning Notice Foreign Exchange and CFD trading are high risk and not suitable for everyone. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. Margin and leverage To open a leveraged CFD or forex trade you will need to deposit money with us as margin. Margin is typically a relatively small proportion of the overall contract value. For example a contract trading on leverage of 100:1 will require margin of just 1% of the contract value. This means that a small price movement in the underlying will result in large movement in the value of your trade – this can work in your favour, or result in substantial losses. Your may lose your initial deposit and be required to deposit additional margin in order to maintain your position. If you fail to meet any margin requirement your position will be liquidated and you will be responsible for any resulting losses.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD tumbles below 1.10 amid weak German PMIs

EUR/USD has dropped sharply below 1.10 after German Manufacturing PMI dropped to 41.4 and other figures are disappointed. Fears of a recession are mounting. ECB's Draghi speaks later.

EUR/USD News

GBP/USD trades below 1.25 as markets await a Brexit breakthrough

GBP/USD is trading below 1.25, little changed. PM Johnson has expressed optimism ahead of meetings with EU leaders in New York. The opposition Labour Party's is trying to iron out its position on Brexit. 

GBP/USD News

USD/JPY: Bulls reasurting themselves amid improved trade sentiment

USD/JPY holds firmer starting out the week, as the optimistic sentiment for trade talks remains on track. However, the further upside remains capped by falling Treasury yields-led broad USD weakness.

USD/JPY News

Top 3 price prediction Bitcoin, Ripple, Ethereum: Bakkt to the Future

Today is the day – the release of futures on Bitcoin by ICE – owner among others by the all-powerful NYSE. This initiative, channeled through the trading platform Bakkt, will allow trading futures on Bitcoin with delivery to maturity.

Read more

Gold climbs to over 1-week tops, around $1520 region

Gold edged higher through the early European session on Monday and is currently placed at over one-week tops, around the $1520 region.

Gold News

Forex Majors

Cryptocurrencies

Signatures