Gold Technical Analysis
Gold (XAU/USD) 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 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 using IG Charts
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
Contact and follow Tammy on Twitter: @Tams707