- Gold has started to erode the 1290 psychological level on failures through 1300 round number.
- Gold targets a break below 1275 for a look in at a confluence area at 1250.
The US dollar index has been a major culprit in the weakness in gold prices of late. However, the greenback seems to have hit a roadblock. The DXY was turned lower at 97.71 highs and is down at 97.20 today as markets cash in on the rallies FX space.
“We continue to see new bids in the cards for the yellow metal, as macroeconomic data is likely set to underperform for a while longer,” analysts at TD Securities argued:
“While we still don’t expect much flow for the moment from algorithmic trend followers, we reiterate that the bar is relatively low for CTAs to significantly add to their length in gold, which argues that the metal will continue to have an asymmetric reaction to the upside on any disappointments.”
Gold is testing below the 23.6% Fibo of the late 2015 lows to 2016 highs at 1296. Below there is the 61.8% Fibo of the 2018 swing highs and lows at 1287. 1258 is the 23.6% Fibo of the 2012 highs to late 2015 swing lows. The main focus, however, stays with the 2018 August lows to 2019 swing highs range and 1275 is a key price target as being the 38.2% Fibo of that same range. Below there opens risk to 1250, a confluence area. On the upside, 1315 is the next key target that meets the trend line prior support of the rising channel.