|

Gold pressured by rising dollar, although price in safe in bull's hands while above 38.2% Fibo

  • Commodities and base metal prices are weighed in a risk-off environment considering global trade relations, Huawei's CFO still in custody and with the news that the highly anticipated Brexit vote could be delayed, thereby prolonging a period of uncertainty.
  • Gold en-route towards the 200-D SMA up at $1,256.90.

The latest data in the Chinese commodity trade print has offered a sign that the front-loading boost to commodity demand may be on the wane, according to analysts at TD Securities who argued that sentiment could be set to deteriorate further in the near-term.  "Further weakness in copper prices could trigger CTAs to significantly add to their shorts, should prices break below our estimated critical value around $5,945/t. At the same time, lead could receive marginal CTA selling on the day as trend followers continue to adjust their positioning."

Spot gold en-route towards the 200-D SMA up at $1,256.90 on risk-off sentiment

Then looking to precious metals, which tend to attract a bid on safe haven flows into gold, in particular, there is a growing sense that gold could find some staying power within this correction, so long as the markets continue to discount prospects of the Fed tightening beyond 2019 which would otherwise support the appeal for the greenback. Gold has made slow progress from the August lows, but progress nonetheless, en-route towards the 200-D SMA up at $1,256.90. "A change in tone by the Fed, combined with the continued deterioration in sentiment with regards to the US growth that could continue to weigh on the dollar, should see the yellow metal supported," the analysts at TD Securities argued. 

However, the greenback has spiked onto the 97 handle on Monday in an impressive recovery from down at 96.36 reaching a high, so far, of 97.22. Gold futures also ended with a loss on Monday, on Brexit related flows that sent sterling over a cliff and the dollar on the rampage. The pound traded to a 20-month low down at 1.2506 at its worst levels for the day on news that PM May cancelled the Parliament vote to bide more time to look to see if there might be a better deal that she could take to her colleagues and right honourable members of the Houses of Parliament for voting on. February gold GCG9, -0.35% fell $3.20, or 0.3%, to settle at $1,249.40/oz after closing on Friday at their highest since July. Silver, on a spot basis, traded between a low and high of between 14.45 and a high of 14.72 on Monday and has closely tracked the prices of Gold, keeping in tune with the general market tone, but with the dollar s perky as this, there could be potential for a break of the 200-hr SMA at 14.43 guarding a deeper retracement back to 14.06.

Silver levels

  • Support levels: 14.50 14.38 14.30
  • Resistance levels: 14.71 14.79 14.92

Silver was consolidated for the best part of Monday, following a spike to the upside on the European handover from Asia to 14.72 that was faded to A North American low of 14.50 and below the pivot of 14.59. There is a bottom in place at 13.90 and the bulls are testing the 100-D SMA located at 14.64 at the top of the Bollinger band resistance level. The 21-4hr support is located at 14.43 of which if gives way, the downside is open to S3 at 14.30.

Gold levels

  • Support levels: 1240 1232 1227
  • Resistance levels: 1253 1258 1265

Bulls remain in control while above the pivot of 1245 with price testing through the 38.2% fibo level. The 200-day SMA near 1,257 should contain price action on the upside ahead of the 50% Fibo level at 1,262. Should the greenback maintain form, the double bottom lows of 26/27th Nov at 1211 with the confluence of the 100 D SMA  could be targetted as last defence of the 1200 handle. 

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

More from Ross J Burland
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD bounces toward 1.1750 as US Dollar loses strength

EUR/USD returned to the 1.1750 price zone in the American session on Friday, despite falling Wall Street, which indicates risk aversion. Trading conditions remain thin following the New Year holiday and ahead of the weekend, with the focus shifting to US employment and European data scheduled for next week.

GBP/USD nears 1.3500, holds within familiar levels

After testing 1.3400 on the last day of 2025, GBP/USD managed to stage a rebound. Nevertheless, the pair finds it difficult to gather momentum and trades with modest intraday gains at around 1.3490 as market participants remain in holiday mood.

Gold trims intraday gains, approaches $4,300

Gold retreated sharply from the $4,400  area and trades flat for the day in the $4,320 price zone. Choppy trading conditions exacerbated the intraday decline, although XAU/USD bearish case is out of the picture, considering growing expectations for a dovish Fed and persistent geopolitical tensions.

Cardano gains early New Year momentum, bulls target falling wedge breakout

Cardano kicks off the New Year on a positive note and is extending gains, trading above $0.36 at the time of writing on Friday. Improving on-chain and derivatives data point to growing bullish interest, while the technical outlook keeps an upside breakout in focus.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Crypto market outlook for 2026

Year 2025 was volatile, as crypto often is.  Among positive catalysts were favourable regulatory changes in the U.S., rise of Digital Asset Treasuries (DAT), adoption of AI and tokenization of Real-World-Assets (RWA).