Gold prices rise within ascending channel

Gold prices pause gains, but XAU/USD remain in a near-term uptrend and eyes shift to US retail sales and University of Michigan sentiment data.

Spot Gold prices marked time over the past 24 hours, pausing the aggressive rise seen earlier this week. The anti-fiat yellow metal tends to inversely follow the US Dollar and Treasury yields. The Greenback leveled out following losses on Wednesday. US government bond yields remained depressed towards the longer maturity spectrum. Front-end rates were slightly higher.

Hawkish Federal Reserve monetary policy expectations have been somewhat leveling off since earlier this week. More than one rate hike by the end of next year has now been priced in, but the odds of a second one stopped rising. This has likely been offering XAU/USD some breathing space of late. The non-interest-bearing asset tends to perform poorly when returns on fixed-income assets increase.

Over the remaining 24 hours, gold will be closely eyeing US retail sales and University of Michigan sentiment data. While outcomes continue to broadly surprise to the downside, this has been by an increasingly shrinking margin since the middle of September. Still, a negative result could hinder hawkish Fed bets, offering further upside room for the yellow metal.

Gold technical analysis

On the four-hour chart below, gold appears to be trading higher since late September within the confines of an Ascending Channel. It’s latest test of the ceiling could warn that the next leg of the uptrend is lower. This also follows negative RSI divergence, showing that upside momentum is fading. A turn lower could place the focus on the 20-day Simple Moving Average for support.

Gold sentiment analysis - neutral

According to IG Client Sentiment (IGCS), about 69% of retail traders are net-long gold. Upside exposure increased by 1.47% over a daily basis, simultaneously decreasing 10.33% compared to a week ago. We typically take a contrarian view to crowd sentiment. Since the majority of traders are still net-long, this suggests prices may continue falling. But, recent shifts in positioning point to a more mixed outlook.

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products. ​

The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Try our free educational resources

Get a deeper understanding of the financial markets – and develop your trading skills – with interactive online courses, webinars and seminars from IG Academy.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.