Jump to content

Gold Price Latest – Struggling With Resistance as US Inflation Data Looms


Recommended Posts

Gold Price (XAU/USD), Chart, and Analysis

  • US inflation data and next week’s FOMC decision will determine gold’s outlook.
  • Client sentiment data shows retail increasing net-long positions.

Gold Price Latest – Struggling With Resistance as US Inflation Data Looms

Today’s US core PCE release (12.30 GMT) and next week’s FOMC policy decision and commentary will steer the price of gold in the short term. Inflation in the US remains at elevated levels and is not seen moving appreciably lower, while the Fed will hike rates by 50 basis points next week, and likely at the next two meetings as well, and give greater clarity about their quantitative tightening program which is expected to start imminently. A backdrop of sharply rising interest rates and unsustainably high inflation will weigh further on the precious metals in the weeks ahead.

For all market-moving data releases and events, see the DailyFX Economic Calendar.

In a report I published earlier this month I highlighted a strong bearish technical signal – a bearish shooting star candle – on the daily gold chart that suggested that the recent uptrend was about to reverse. This signal played out perfectly and sent gold nearly $110/oz. lower over the next 9 days.

Gold Price – Feeling the Strain as US Treasury Yields Continue to Rise

Retail trade data – see below – shows that investors continue to build net-long positions in gold over the past week. We use client sentiment data as a contrarian indicator and this suggests that gold may fall further.

The daily chart shows gold trading around an old technical level of note on either side of $1,916/oz. This level turned from resistance to support over the prior months and now is acting as resistance again. This level also guards an old 61.8% Fibonacci level at $1,921/oz. from the August 2020-August 2021 sell-off. Support at $1,877/oz. held a second test yesterday and will act as first-line support to any move lower.

Fibonacci Application in Financial Markets

GOLD DAILY PRICE CHART – APRIL 29, 2022

Gold Price Latest – Struggling With Resistance as US Inflation Data Looms

 
 

Retail trader data show 81.99% of traders are net-long with the ratio of traders long to short at 4.55 to 1. The number of traders net-long is 2.45% higher than yesterday and 3.46% higher from last week, while the number of traders net-short is 5.79% lower than yesterday and 26.30% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Gold-bearish contrarian trading bias.

image.png

What are your views on Gold – bullish or bearish?

 

 

Apr 29, 2022 | DailyFX
Nick Cawley, Strategist

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,986
    • Total Posts
      87,946
    • Total Members
      69,133
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    lsujeff1
    Joined 25/09/22 01:57
  • Posts

    • Hey @pravid17 I hope you're well.  In the leveraged trading industry there are brokers who don't hedge client's exposure and brokers (like ourselves) who do hedge client's exposure.  In a perfect world the exposure of short clients would net off the trades of long clients however this is not always the case. Our hedging model allows us to take an exposure in the underlying market for the remaining exposure which doesn't offset - This way we don't need to hedge every trade, worry about profits of our clients and results in lower costs for hedging in the underlying market (commissions, interest etc.). So say 60% of IG customer exposure in the ASX was long and 40% of exposure on the ASX was short. The 40% would net each other off but there's a remaining 20% of customers who need to be hedged to cover their positions. We go into the market and hedge this.  We make our money primarily through our spreads and overnight funding  with other fees making up a small proportion of our revenue. I would like to remind also that IG is regulated by several bodies globally, including top-tier regulators like the UK's FCA, Germany's BaFIN, Australia's ASIC - This should be quite reassuring from a dealing execution and transparency perspective.  I hope this helps, let me know if you have any other question 
    • A survey from Reviews.org, which featured 1000 Americans, found that as many as 1 in 4 US subscribers may quit the service in the next year.    Jeremy Naylor | Writer, London | Publication date: Friday 23 September 2022  There was an interesting breakdown, but the main reason was affordability. Only 18% said they would move to a cheaper competitor. IGTV’s Jeremy Naylor looks at the numbers. Netflix subscription woes Netflix Inc (All Sessions) could be in for a rough time ahead over the next 12 months if a new survey is anything to go by, which was conducted in the US. Out of the 1,000 adults that took part in this survey undertaken by Reviews.org, around 25% of those that were covered said that they would be cancelling their Netflix subscription within the next 12 months. Now, it says with that 25% of US subscribers to Netflix considering leaving, not to join a competitor, but mostly because of pressures on household bills. This is how it is split: rising cost of subscriptions - 40% inflation - 20% a lack of content - 22% spending more time on the services of others - 18% So you can see, a minority said they were going to other services, such as those provided by Disney Plus or Amazon Prime. The cost of Netflix has risen dramatically this year as its basic plan increased by 11% in January and its other plans by 20% to 25%. Now these were the first price increases for three years, so that itself is relatively new for a lot of subscribers. Netflix share price Let's take a look at the Netflix share price. You can see on the far left hand side of this chart the COVID lows at $290.39. We saw a whacking great increase there of 141% to the top and the record high in Netflix shares back in November 2021. And that was when subscriptions were rising, people were paying more for their services, and it was all humming beautifully. And then all of a sudden people started questioning the numbers of streaming services they were undertaking with some deciding to withdraw from Netflix. All of a sudden the big drops started coming through with profit warnings and sales warnings. We've recently hit a new low of $162.50. Since then there has been a little bit of an increase. We're currently trading at $232.75, but we are down by a margin of 1.75% in today's session, which reflects this news that we could well see a relatively large drop in subscribers for Netflix in the US within the next 12 months.
    • Market data to trade the week of 26 September: Nasdaq; NXT From the economic calendar next week IG technical analyst, Axel Rudolph, picks up on a short trade on the Nasdaq around US inflation data. Meanwhile, despite another light week of corporate data, Axel picks out the chart of Next plc (NXT) as an interesting trade to think about.          
×
×
  • Create New...