Stock market: the earnings of Cisco, Nvidia, and Walmart
The earnings season in the United States is still on. This means that stocks of the largest American companies will likely make big moves.
Will gold’s downtrend end?
In the recent days, the US dollar index reached the highs of July 2017. It’s not a surprise that other assets significantly depreciated against the USD. Gold isn’t an exception.
The downward trend of XAU/USD has been continuing since the middle of April 2018. It seemed an escalation of the trade wars tensions should support gold as it’s the safe-haven. However, it didn’t happen as the USD appeared to be the stronger safe-haven in the environment of trade wars. Moreover, all this time the US dollar has been supported by American rate hikes. That made it even stronger. As we can see, gold just didn’t have chances to rise in such conditions.
However, as we know markets are highly changeable. The downtrend will be replaced by the uptrend one day. But when will the reversal point for gold happen?
According to the CFTC Commitment of Traders report, net short positions for gold increased in the week to August 7.
However, every trader should remember the main rule: sell in good times, buy in bad times. We see that the number of short positions significantly increased. It may signal that soon traders will want to buy gold as the price will be low enough.
As a result, an important question is raised: when it’s time to start buying. Is gold at the lowest levels now or it’s better to wait longer?
According to Bloomberg, hedge funds have never been so pessimistic about gold prices. Managers bet on the further decline. Analysts say gold prices will keep suffering in the short term. However, there are no fundamental factors that can help us to make predictions now. That’s why let’s have a look at the technical side.
Up to now, XAU/USD has been trading at lows of the end of 2016. MAs has been moving down and the Ichimoku cloud signals the further fall of the pair. The next support is at 1,180. In case the pair breaks this level, the further great plunge to 1,125 will be anticipated.
To understand when the reversal point is, it worth to look at the Relative Strength Index. The main idea is that when the index is above 70, the pair is overbought, it’s time to sell. When the index is below 30, the pair is oversold, so it’s time to buy. Up to now, the index is at 30. As a result, we don’t see the strong signal that the pair is oversold. Therefore, the time to buy hasn’t come. As soon as the index is below 30 and other technical indicators such as MAs, candlesticks, MACD signal reversal, traders should open long positions.
Making a conclusion, we can say that the gold market is anticipated to fall further in the near future. However, upside risks exist. Traders should pay attention to the technical indicators that will give a clearer picture of the further direction of the gold prices.
Darya Bobrova
Similar
The European Central Bank, Christine Lagarde and the euro
Will the new ECB president continue the monetary policy of Mario Draghi or there will be a new direction? We discuss what changes Christine Lagarde may bring to the Eurozone and how it may affect the euro.
Stock market: the earnings of Disney
Walt Disney will release its financial results on Thursday, November 7. Let’s have a look at the fundamental and technical picture for this stock.
Latest news
GBP/USD: levels to trade
GBP/USD has been consolidating between 1.30 and 1.2770 for the past month. The pair met resistance at the resistance line connecting October and November highs.
AUD/JPY needs to decide
AUD/JPY has reached the support line connecting August and October lows in the 73.30 area. What's next?
The USD/CAD on a bullish reversal
The USD started the day dropping against the Canadian dollar, now on a bullish reversal.
Deposit with your local payment systems
