Gold Price Boosted by Flagging US Dollar, Tempered by Risk-On Hints

Gold (XAU) Price, Charts and Analysis

  • US dollar on the backfoot and below trend support.
  • Positive take from latest US-China trade talks and Brexit negotiations.

Q4 2019 Gold Forecast and Top Trading Opportunities

Gold is back above $1,500/oz. in early trade, boosted by a weak US dollar complex. The US dollar basket (DXY) has opened below recent trend support off the June 25 low for the first time flashing a bearish signal. US President Trump is meeting Chinese Vice Premier Liu He today amid signs that talks are taking a positive shift for the first time since the trade war erupted over 15-months ago. Brexit talks have also taken a turn for the better in the last 24 hours with both sides suggesting there is a pathway forward, the first time that the two sides have agreed on anything for months.

Any progress in talks between the two super powers will be welcome news for financial markets and trigger a fresh risk-on move, pushing the value of the safe-haven US dollar lower. The daily chart below shows today’s trend break, leaving the USD at risk of further falls.

US Dollar Basket Daily Price Chart (April – October 11, 2019)

Gold continues to re-build a base between $1,480/oz. and $1,490/oz. after the late September/early October sell-off. Current price action is just below the 20- and 50-dma and these moving averages will need to be cleared to allow gold to push higher. Above here, two recent high prints at $1,517/oz. and $1,519.5/oz. need to be closed above to open the way to the September 24 high at $1,535.8/oz.

Gold Price Daily Chart (January – October 11, 2019)

Gold Price Boosted by Flagging US Dollar, Tempered by Risk-On Hints

IG Client Sentiment data show that 64.0% of retail traders are net-long of gold, a bearish contrarian indicator. See how daily and weekly shifts in positioning change trader sentiment.

How to Trade Gold: Top Gold Trading Strategies and Tips

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

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 at nicholas.cawley@ig.comor via Twitter @nickcawley1.

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