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David Becker
Comex Gold
Comex Gold

Gold prices were nearly unchanged on Monday, moving sideways after Friday’s rebound. There was little movement in the US dollar on Monday, as US yields edged higher. There were no major economic data points to drive market sentiment on Monday. Traders focused more on the risk on trade which provided the backdrop for stock around the globe to rally.

Technical Analysis

Gold prices traded sideways, hovering near the upper end of last weeks rally. Short-term resistance is now seen near the 10-day moving average at 1,222. Prices have edged above former support which turned into resistance which is the July 2017 lows near 1,204.  A break of this level would lead to a re-test of the 1,180 range. Negative momentum is decelerating and short-term positive momentum is accelerating according to the MACD and the fast stochastic. The fast stochastic generated a crossover buy signal from oversold territory. This represents accelerating positive momentum. The current reading on the fast stochastic is now 26, which is above the oversold trigger level of 20. The fast stochastic was oversold on Friday and during most of last week. This is a short-term buy signal. The MACD (moving average convergence divergence) histogram is printing in the red but the trajectory is turning up which represents decelerating negative momentum.

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Is the Fed Less Hawkish

The Fed’s Dovish Signal Means Rates Will Only Rise One more Time in 2018. Gold prices were nearly unchanged which is a sign of indecision following a rally in the yellow metal last week. The dollar started giving back some of its momentum last week and the profit taking accelerated into the central bank symposium in Jackson Hole Wyoming. The dollar has room to fall and could be forming a head and shoulder pattern on the dollar index. This could foreshadow a lower dollar and strong riskier assets like stocks.

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