David Becker
Add to Bookmarks

Gold prices edged higher but traded in a very tight range on Tuesday as most of the market’s focus was on riskier assets. The dollar continued to rebound, but the movements in the greenback have been positively correlated with the greenback lately. Hedge funds continue to remain long futures and options according to the latest commitment of trader’s report released for the date ending April 28. US yields were nearly unchanged which kept gold prices rangebound. Gold implied volatility which is a component used to price gold options remained elevated and rose 3.5% back to 24%. In 2019, the average gold implied volatility was approximately 15%.

Trade gold with FXTM

Know where Gold is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Regulated By:CySEC, FCA, FSC

Foundation Year:2011

Headquarters:30 Churchill Place, London, E14 5EU, UK

Min Deposit:$10

Visit Broker

82% of retail CFD accounts lose money

Technical Analysis

Gold prices remained rangebound stuck between resistance near the 10-day moving average at 1,710 and support near the 20-day moving average at 1,701. Additional support is seen near the May lows at 1,670. The weekly chart of gold prices is forming a bull flag pattern which is a pause that refreshes higher. Gold will likely test the April highs near 1,747, but if it fails to break out, prices will form a triple top which is a bearish reversal pattern.

Short term momentum on gold prices has turned positive as the fast stochastic generated a crossover buy signal in the middle of the neutral range. This is likely a signal of further consolidation. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.


Strong Debt Buoys Gold

The US is borrowing at the treasury level as well as at the consumer level. The New York Federal Reserve reported on Tuesday that household debt March totaled $14.3 trillion, a 1.1% increase from the previous quarter far surpassing the prior cyclical high of $12.7 trillion in the third quarter of 2008. Credit card balances fell $34 billion. Mortgage balances rose $156 billion to $9.71 trillion.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker