- Gold price has come under pressure on a spot basis, but a break of daily resistance this week could be on the cards.
- Meanwhile, mitigation of lower time frame price imbalances could be in play to start the week off.
Before getting into the spot gold price technicals, analysts at TD Securities explained that money managers aggressively liquidated gold longs as a hawkish Fed continues to sap interest in the yellow metal.
''After all,'' the analysts said, ''as the world chases the same hawkish Fed narrative, position squeezes continue to drive price action in the yellow metal.''
''Notwithstanding, proprietary traders are the cohort raising risks of additional liquidations, after having built a massive and complacent position since the pandemic. While the war in Ukraine has sent the bears packing at prop-shops, the cohort's longs have yet to capitulate. This week, prop traders only marginally liquidated their length, whereas the breadth of traders long hasn't budged, suggesting a liquidation event is still forthcoming.''
For the technical outlook, as per the prior pre-open analysis for last week, Gold, Chart of the Week: XAU/USD bulls need to hold $1,850 or a 61.8% golden ratio will be next on bear's menu, it was shown that the daily chart's W-formation's neckline near a 61.8% golden ratio was yet to be fully tested:
Gold daily chart, live market
As illustrated, the price moved in on the area and completed the retest of the neckline. This now offers prospects of a move higher from here following the move out of the downside channel. However, the resistance will need to give:
Gold, H1 chart
For the open, the hourly chart could see some initial bids come through to mitigate some of the latest bearish impulse. The 50% mean reversion area aligns with the prior support as a target. However, should resistance hold up, there could be a move into the downside to fully test the demand area in the $1,840s again.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD eases toward 1.0700 as USD finds feet ahead of ADP, Fed Minutes
EUR/USD is retreating toward 1.0700 in the early European session on Wednesday. The pair struggles, as the US Dollar finds its feet in the aftermath of the dovish Fed Chair Powell's comments. Cooling EU inflation keeps the Euro undermined. Eyes turn to US ADP data, Fed Minutes.
GBP/USD flatlines below 1.2700, looks to US data/Fed minutes
GBP/USD is lacking a firm directional bias below 1.2700 on Wednesday, reversing early gains. Traders appear reluctant and prefer to wait on the sidelines ahead of the FOMC minutes while the UK elections on Thursday also keep them on the edge. US ADP data eyed as well.
Gold eyes a range breakout, as Fed Minutes looms
Gold price is trading around a flatline near $2,330 early Wednesday, as traders consider the recent US jobs data and Federal Reserve Chairman Jerome Powell’s speech, bracing for yet another busy US calendar.
Bitcoin struggles around $64,000 level
Bitcoin faces resistance near the $64,000 daily level, leading to a 1.05% decline in trading on Wednesday. Ethereum and Ripple similarly encounter resistance, resulting in 1% and 0.5% declines, respectively.
UK election update: Labour slips in the polls, but remains trusted with the economy
With one day left before the election, the polls suggest that it will be an easy win for Labour, the question is the magnitude of their victory. The final polls before election day have seen support for Labour slip.