Alexander Kuptsikevich
FxPro Financial Services Limited
Gold has hit all-time highs on each of the last six trading days. Thursday's touch of $2685 followed the strongest selling momentum since 18th September, when initial profit-taking expanded following the release of strong GDP growth estimates.
Short-term intraday profit-taking is both fuel for further gains and a sign of uncertainty at this stage of the market. Technically, gold has already crossed above the 161.8% level of the two-year rally since August 2018 - a typical rally extension pattern along Fibonacci levels. When the price has moved so far into the area of historical highs, it becomes more difficult to find new upside targets.
More attention is now being paid to looking for signs of overbought conditions. On the weekly timeframe, the RSI index is approaching the overbought level of 80. This is only the sixth time since 2008 that the index has entered this territory, with corrections of 6-20% following. The last one was 6% at the end of last year, but the others were much deeper. In 2011, this overbought area locked in a price peak for the next nine years.
Gold's strong rally over the past three weeks is the most dangerous part of the trend for short-term sell-side traders who get involved in selling without reliable signals. On a weekly timeframe, such a signal would be a negative weekly close. We will get this signal next Friday at the earliest. The publication of monthly data on the US labour market will reinforce its importance for the markets.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
EUR/USD nears 1.1200 after US PCE inflation data
EUR/USD approaches 1.1200 following generally softer-than-anticipated US inflation-related figures. The pair lacks momentum amid tepid European data undermining demand for the Euro. Still, optimism weighs on the USD.
GBP/USD battles the 1.3400 level for a definitive bullish breakout
GBP/USD advances modestly beyond the 1.3400 level after US PCE inflation data showed price pressures continued to recede in August. Sterling Pound aims for fresh yearly highs beyond the 1.3433 peak posted earlier this week.
Gold hovers around $2,670 as US Dollar resumes decline
Gold price retains its bullish bias near fresh record highs, as demand for the US Dollar remains subdued following US PCE inflation figures. The strong momentum around stocks limits demand for the safe-haven metal.
Week ahead – NFP on tap amid bets of another bold Fed rate cut
Investors see decent chance of another 50bps cut in November. Fed speakers, ISM PMIs and NFP to shape rate cut bets. Eurozone CPI data awaited amid bets for more ECB cuts. China PMIs and BoJ Summary of Opinions also on tap.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.