With a very thin economic calendar today, we want to take a look at the technical, but also the sentiment-technical side of Gold today. As we pointed out in our last weekly market outlook last Monday, as long as Gold trades above 1,275/277 USD/ounce, chances are high that we get to see another attempt to break above 1,300 USD, and with such a break higher, an acceleration up to 1,308/310 USD/ounce is very likely. With a considerably strong weekly close, bulls paved the way for a strong start heading into the week for the yellow metal.
Source: Economic Events 28 January 2019 – Admiral Markets’ Forex Calendar
And while from a fundamental perspective, with the ongoing US shutdown, Gold bulls currently have the advantage on their side, in addition, we should also remember that Gold still finds itself in a favourable, seasonal pattern, which favours long engagements. On the other hand, all that glitters is not necessarily Gold, and Gold bulls should be careful a little, the reason being: there is a positive correlation between Gold and the Chinese Yuan Renminbi. And the tough negotiations between the US and China in regards to the ongoing trade war which favours a weaker CNY, and with that being said, a weaker Gold price too. So, from a technical side, a break below 1,275/277 would most likely go hand in hand with a drop lower, with a target around 1,260 USD.
Source: Admiral Markets MT5 with MT5SE Add-on Gold 4-hourly chart (between 07 January 2019 to 25 January 2019). Accessed: 25 January 2019 at 10:00 PM GMT – Please note: Past performance is not a reliable indicator of future results, or future performance – In 2014, the value of Gold fell by 1.7%, in 2015, it fell by 10.4%, in 2016 it increased by 8.1%, in 2017 it increased by 13.1%, in 2018, it fell by 1.6%, meaning that after five years, it was up by 6.4%.
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