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Gold Price Forecast: "a Difficult Moment for the Bulls"

Gold price analysis

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The gold price is down slightly on Monday at $1974/ounce but analyst and technical forecaster Richard Perry of Hantec Markets says the bulls remain firmly in control of the precious metal.

With such an impressive run higher and momentum indicators still stretched to extreme levels, there are growing questions over just how far the gold rally can go.

For now though, the bulls are resisting the temptation to take profits.

Throughout last week, there was resistance hit at $1980, however, the all-time high has once more been extended this morning, hitting $1984 early today.

Gold price chart

This is a difficult moment for the bulls, as there are hints of slowing momentum still on the hourly chart, but without any outright sell signals.

Hourly MACD lines and Stochastics are less positively configured, but do not exhibit anything overtly corrective.

There are support levels that are being left to take note of. Friday’s initial low at $1960, whilst Thursday’s reaction low at $1940 is a more considerable higher low.

If they begin to be broken then there is more reason for the bulls to be worried.

For now though the bulls continue to defend well against potential profit taking and $2000 is still a realistic target.

 

Markets: Dollar Looking Firmer

There is plenty for markets to contemplate as trading begins for August.

The dollar has been under huge pressure in recent weeks as traders have factored for an underperforming US economy due to the alarming second wave COVID infections.

However, as other countries increasingly find their own problems with second waves (the Australian state of Victoria going back into lockdown), perhaps the US dollar may begin to find some respite? Could a rebound on the dollar become an August story?

Hints of a dollar rally this morning, but as yet nothing confirmed. It may depend upon leaders in Congress coming to an agreement on how to react as emergency US employment support expires.

As yet, there is no consensus of how to push forward, but another fiscal package to support the labor market would help to allay fears of faltering consumer confidence.

Risk appetite has certainly been wavering in recent sessions, but the better than expected China Caixin Manufacturing PMI has helped to prop up sentiment this morning. The manufacturing PMIs for July could be a driving factor through today’s session, with eyes on the ISM data later today.

Wall Street closed a tumultuous session on Friday with S&P 500 gains of +0.8% at 3271, whilst futures are a touch weaker today with the E-mini S&Ps -0.1%.

Asian markets took the lead from the Chinese PMIs with the Nikkei +2.2% and Shanghai Composite +1.4%.

In Europe there is a mixed look to early moves, with FTSE futures -0.2% and DAX futures +0.2%. In forex, USD is climbing through the majors, with CHF and AUD primarily weaker.

In commodities, hints of a dollar rebound are weighing slightly on gold and silver, whilst oil is just under -1% lower.