Bulls Dominate Gold As Expected – What’s Next?

As referenced in our earlier live market update on gold, the precious metal has found support above $1,240 in the US trading session due to weakness in the US dollar. Unfortunately, our forex trading signal on gold floated in profit for a long time before closing at the stop. However, the market moved higher right afterward, testing our suggested target level.

In addition to the stronger dollar, there is a decline in equity markets lead by the slump in the oil prices.  The cheaper oil prices dampened hopes of additional Fed tightening which ultimately underpins the gold.

In the European session yesterday, Haldane, the chief economist of Bank of England, voiced his intention to vote for an interest rate hike through the second half of 2017. Consequently, investors shifted their investments from the overbought US dollar to the fundamentally supported sterling.

Forex Trading Signal – Intraday

Honestly, I wanted to hold my previous buy position at $1246, but the stop loss through me off. At the moment, it's between trading levels and taking a buy/sell would be risky. Nevertheless, I'm keeping my eyes on $1246/47 to try and take a buy position to target $1256 & $1265.

Gold – Bullish Channel – Hourly Chart

Technical Outlook

On the daily chart, we can see a crossover in 20 & 50-period moving averages which are implying a bullish trend in the gold. As advised in our previous update, we can see a bullish channel on the gold daily chart. The precious metal was consolidating right above the trendline support level of $1242 and finally made its movement upward. The immediate resistance is found at $1256 & $1265

The RSI & Stochastic have also crossed above 50, which emphasizes a potential beginning of a bullish trend. Now, let's wait and see the outcome of US claims in the US sessions to determine further movement.