Gold Price (XAUUSD) Forecast – Setting Up a New Trading Range

Gold (XAU/USD) Analysis, Price and Chart

  • Gold nears moving average resistance.
  • Monday’s bear candle will likely trap gold’s price action.
  • Client sentiment is mixed despite clients being heavily long.

Gold had a sharp turn for the worse on Monday, selling off by around $100/oz. at one stage as positive

coronavirus vaccine news hit the wires. Coming on top of a Joe Biden victory in the US presidential elections,

investors dumped traditional safe-haven markets and piled into riskier assets. This sharp sell-off produced a

large bear candle on Monday which is likely to constrain price action in the short- to medium-term. While

today’s candle is mildly positive, after breaking a four-day series of lower highs, gold is struggling to make a

decent move, in either direction.

Up ahead, the 20- and 50- day simple moving averages converge just above the $1,900/oz. mark. Above here

a cluster of recent highs will slow price action down as gold approaches the 23.6% fib retracement at

$1,928/oz. It may prove difficult in the short-term for gold to break above here. There is likely reasonably s/t

support either side of $1,850/oz. from recent low prints, before 38.2% fib at $1,836/oz. and the 200-day sma

at $1,824/oz.

While the chart continues to show a neutral bias, as it currently is, Monday’s $1,850 -$1,964/oz. candle will

hold sway over any price movement. Indeed it may well hold running into the end of the year.

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Gold Forecast

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Gold Daily Price Chart (March – November 13, 2020)

Gold Price (XAUUSD) Forecast - Setting Up a New Trading Range

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily -4% 4% -2%
Weekly 16% -25% 6%

IG retail trader datashow 84.04% of traders are net-long of gold. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall.Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias.

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What is your view on Gold – are you bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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