Gold is regaining poise in Asia, rising call demand suggests more gains ahead


  • Gold is mildly bid in Asia, possibly tracking losses in the greenback.
  • Investors continue to add bullish bets, risk reversals show. So, 200-day moving average (MA) of $1,255 could be put to test soon.

Gold (XAU/USD) is currently trading at $1,245, having clocked a low of $1,242 earlier today.

The moderate gains could be attributed to weakness in the US dollar - gold's biggest nemesis. The dollar index, which tracks the value of the greenback against major currencies, is currently trading at 97.11, representing a 0.12 percent drop on the day.

It is worth noting that the US dollar picked up a strong bid on Monday reportedly due to Brexit uncertainty. The dollar index added almost 100 pips, capping upside in the yellow metal at a five-month high of $1,251.

Notably, the DXY engulfed previous three daily candles, meaning further gains cannot be ruled out. That, indeed, is bad news for gold.

The rising demand for gold call options (bullish bets), however, indicates that investors are expecting the yellow metal to remain better bid while heading into the year-end.

The three-month 25 delta risk reversals (XAU3MRR) are currently trading at 1.125 in favor of gold calls - the highest level since June 15. More importantly, risk reversals stood at -0.125 in favor of puts (bearish bets) just two weeks ago.

Gold, therefore, looks set to test the 200-day moving average (MA), currently lined up at $1,256.

XAU3MRR

Gold Technical Levels

XAU/USD

Overview:
    Today Last Price: 1245.45
    Today Daily change: 1.1e+2 pips
    Today Daily change %: 0.0892%
    Today Daily Open: 1244.34
Trends:
    Previous Daily SMA20: 1226.37
    Previous Daily SMA50: 1224.54
    Previous Daily SMA100: 1211.92
    Previous Daily SMA200: 1232.22
Levels:
    Previous Daily High: 1250.85
    Previous Daily Low: 1241.8
    Previous Weekly High: 1250.1
    Previous Weekly Low: 1221.39
    Previous Monthly High: 1237.4
    Previous Monthly Low: 1196.4
    Previous Daily Fibonacci 38.2%: 1245.26
    Previous Daily Fibonacci 61.8%: 1247.39
    Previous Daily Pivot Point S1: 1240.48
    Previous Daily Pivot Point S2: 1236.62
    Previous Daily Pivot Point S3: 1231.43
    Previous Daily Pivot Point R1: 1249.53
    Previous Daily Pivot Point R2: 1254.71
    Previous Daily Pivot Point R3: 1258.58

 

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