XAU/USD: Where To Next

Published date: 26/09/2018

Having had 12% of its value chopped since April, Gold prices are stalling at the $1200.00 key level. Last week’s candle failed to close above this level showing potential for further downside, however, the current weekly candle is engulfing the two previous weeks bodies suggesting a possible pullback or reversal. If we see a clean break out, retest and continuation beyond $1215.00 resistance we can see short to medium term longs come into play, however, ultimately my bias is still short on this pair.

If we see a price spike back below $1200.00 and form a big bearish candlestick my first target for XAUUSD is $1163.00 followed by major support level $1131.00, if this level is broken there is only one place Gold is heading, straight to the 2016 lows of around $1050.00. This would be a significant point for the price of Gold as its future would be dictated by current world events. If the Dollar were to finally collapse as it inevitably will being a Fiat currency with no true backing except the words and actions of a dangerously erratic leader. Then the value of the Commodity will explode to levels many do not believe are possible. $10,000.00 per ounce.

Current world conditions are putting pressure on the Gold with trade disputes between Washington and Beijing, with Trump imposing 10% tariffs on $200 Billion of Chinese imports with the threat of that number increasing to 25% by year-end. With expected retaliation from the Chinese, this could affect the dollar value as uncertainty creeps into investors minds. This uncertainty would lead to money being moved into Gold, increasing prices in the short term. President Trump, however, appears to be taking his usual balls deep almost bullying approach and threatening any response with what officials call ‘phase three’ which is tariffs on an additional $267 Billion of additional imports.

It is likely that Trump will come out of these disputes with the outcome he wants, as he usually does. This might not be teetering on the edge of World War 3 as he was during his ongoing dispute with North Korean leader Kim Jong-Un, although such occurrences show how relentless and outright fearless the President can be.



  • XAU/USD: Where To Next
    Oageng says:

    It great to see one's analysis corresponding with that of EFX. This was well broken down. =}

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