Gold Price Analysis: Resistance May Come Under Renewed Pressure
GOLD PRICE FUNDAMENTAL AND TECHNICAL OUTLOOK
The price of gold continues to move higher, aided in part by renewed trade tensions between the US and China with suggestions now that an agreement may not be as close as recently suggested. The precious metal also got a bid from the escalation of violence in Hong Kong as extradition bill protests took another turn for the worse. US Treasury yields also fell Monday, aiding the move higher.
The daily chart shows that gold’s recent turnaround off its three-month saw a bullish candlestick formed, a technical signal that suggest higher prices ahead. And another hammer doji was formed yesterday as the price of gold closed near its high. Today’s price action should be noted with a close above yesterday’s high - $1.474/oz. – a bullish confirmation signal. The CCI indicator at the bottom of the chart shows that gold has moved out of oversold territory.
For gold to make another attempt at $1,500/oz. and above, the spot price will need to take out two levels of resistance. The 20-day moving average is currently around $1,480/oz. while the 50-day moving average currently sits around $1,490/oz. The first level of support for gold is the 23.6% Fibonacci retracement level at $1,463.5/oz. ahead of the $1,453 - $1,456/oz. zone.
GOLD PRICE CHART (MAY – NOVEMBER 19, 2019)
IG Client Sentiment shows how traders are positioned in a wide range of assets and markets. Retail customers are 73% net-long gold, a bearish contrarian bias. However daily and weekly sentiment shifts give us a bullish outlook.
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