Gold Prices May Fall as Chart Warns of Topping Below $1700

Posted 03 March, 2020

GOLD TECHNICAL ANALYSIS – TALKING POINTS:

 

  • Gold prices falter below $1700/oz figure, slide back to trend support
  • Dark Cloud Cover candlestick setup, RSI divergence warn of topping
  • Retail trader sentiment studies offer mixed cues, bias favors weakness

 

 

Gold prices, after a slight rise to seven-year highs, were slightly below $ 1,700 an ounce. The metal is now hovering slightly above the resistance unfolded in the support area 1535.03-57.10, a barrier reinforced by a rising trend line that defines an upward slope from 2019. Middle. A break below this limit can counteract short-term upward pressure and allow for downward expansion.

 

Gold price chart - daily

Gold price daily chart created using TradingView

 

As the weekly schedule approaches, the tracks seem to be pointing down. The bearish pattern of the Dark Cloud candlestick looks higher. Negative RSI differences support the negative scenario, suggesting that the negative RSI disappears. Applying changes seems to require a complete break with trend support.

Gold price chart - weekly

Gold price weekly chart created using TradingView

 

 

GOLD TRADER SENTIMENT

 

Chart of gold price, retail trader sentiment

 

 

Retail sentiment data show that 74.29% of traders are cash and the long to short ratio is 2.89 to 1. The number of cash long traders is 14.27% higher than yesterday and 1.52%. lower than last week, while the net short score is 27.02% higher than yesterday and 37.32% lower than last week.

IG Client Sentiment (IGCS) is typically used as a contrarian indicator, soretail traders being net-long suggests gold prices may continue to decline. However, positioningis less net-long than yesterday even though it is moresocompared with last week.This makes for a clouded sentiment-based outlook.

 

GOLD TRADING RESOURCES:

Previous forecast

04 March, 2020 15:33

← Crude Oil Prices at the Mercy of Risk Trends

WTI oil cratered through 2016 trend-line, near December 2018 low.

Crude Oil Prices at the Mercy of Risk Trends

Next forecast

28 February, 2020 16:06

Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook →

The spread of the Coronavirus has prompted a sharp deterioration in risk appetite with equity markets tumbling, which in turn has seen investors seek safety in gold. Alongside this, oil prices have descended into bear market territory, consequently, pushing global inflation expectations lower and thus markets have repriced the likelihood of continued central bank easing. However, while volatility across various assets have soared, we put these moves into context based on previous virus outbreaks.

Coronavirus Impact: S&P 500, DAX, Gold and Crude Oil Outlook
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