Gold Technical Analysis
Gold[1] (XAU/USD[2]) has risen above the $1,800 psychological level, prior resistance that had held bulls at support for some time. With inflationary pressure on the rise, both Gold and Silver[3] have benefited from recent USD weakness and the low treasury yields that have continued to boost demand for alternative assets.
With Gold prices recently breaking through the 50% Fibonacci retracement level that previously provided support at $1,818, the 50% Fibonacci retracement level of the 2021 move, focus now shifts to the next key psychological level of $1,900. With the release of Non-Farm Payrolls on Friday 06 August 2021, Gold traders may be poised for a fresh break in either direction depending on the reports results.
Meanwhile, Gold prices continue to threaten the 38.2% retracement level of the historical level of $1,834 while the RSI continues to edge higher.
Gold (XAU/USD) Daily Chart
Chart Prepared by Tammy Da Costa[4] using IG Charts
Gold Sentiment
Gold: At the time of writing, Retail trader data shows 81.94% of traders are net-long with the ratio of traders long to short at 4.54 to 1. The number of traders net-long is 0.25% higher than yesterday and 1.00% higher from last week, while the number of traders net-short is 1.74% higher than yesterday and 0.49% higher from last week.
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.
--- Written by Tammy Da Costa, Analyst for DailyFX.com
