‘The rise in gold is largely a dollar play, with the dollar weakening because of Trump. There’s still more downside risk to gold in the long run, but in the short-term, given what the North Koreans are doing and what Trump is doing, the dollar is inherently weak.’ – Oversea-Chinese Banking Corp. (based on Bloomberg)
Pair’s Outlook
The XAU/USD cross has been recovering since it touched the broadening rising wedge’s support line one week ago. Gold has little room left before it could be forced to make a potential U-turn, as there is a substantial resistance cluster located around 1,246.50, formed by the monthly S1, the weekly R2, the 20, 55 and 200-day SMAs. A successful breach of this resistance is likely to allow the yellow metal to keep appreciating until the 10-month down-trend could be reached. Assuming this down-trend is overcome, the metal would have the potential to approach the wedge’s resistance, but that all depends on this week’s performance.
Traders’ Sentiment
Today 54% of all open positions are long (previously 52%), whereas 66% of all pending orders are to buy the gold.
