CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Precious GOLDen signs for bears

Article By: ,  Financial Analyst

Earlier this week, we highlighted the possibility for a correction in gold as the metal traded around the key $1550 hurdle. Much of what we said on Monday remains relevant today: the revival of hopes for a trade deal between the US and China, as well as reduced risks of a no-deal Brexit have helped to reduce demand for haven assets. But gold investors ignored these factors and the metal briefly broke above last week’s high by mid-week and the rise in risk appetite was evidenced instead by an upsurge in equity prices and commodity dollars. However, gold could not hang on to those gains and a sharp sell-off followed yesterday which saw the metal turn negative for the week. So, the correction potential is still there – barring an unexpected U-turn in risk appetite and/or a big sell-off for the dollar in response to today’s US jobs report.

In fact, after a 4-month rally, the precious metal looks technically overbought anyway and so a correction of some sort could be due. Assuming (and that’s a big assumption by the way, given the upcoming NFP report) gold does not stage a sharp recovery here, it will have created its second consecutive bearish weekly candle around major long-term resistance circa $1555. The metal was probing short term support around $1505 at the time of writing. If this level gives way meaningfully then the next key support comes in all the way down around $1450 on the weekly time frame.


Source: Trading View and City Index


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