Gold Price (XAU/USD), Chart, and Analysis
- Gold is struggling to make any headway.
- Will Tuesday’s US CPI data match the Fed’s hawkish narrative?
Recommended by Nick Cawley
How to Trade Gold
US Bond Yields Rally Further Ahead of a Major US Inflation Report
Federal Reserve chair Jerome Powell will be watching Tuesday’s US CPI release (13:30 GMT) with interest to see if the numbers match his, and a range of Fed board members, view on the path for US interest rates over the coming months. Fed talk took a hawkish turn after the last US Jobs Report showed hiring at multi-month highs, and the ongoing Fed narrative that rates may need to go a little higher and stay there for a little longer has capped risk appetite since then. The latest CME rate probabilities suggest a Fed Rate of 5.00%-5.25% going into the last meeting of the year. The current Fed target rate is 4.50%-4.75%.
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Gold has moved lower over the last 8 sessions with little in the way of any rebound. The daily chart shows the precious metal breaking below the 23.6% Fibonacci retracement of the September – February rally at $1,879/oz. and this is now likely to become initial resistance. The 20-day moving average has turned lower, while gold is now testing the 50-dma, an indicator that has provided support since early November. One momentum-based technical indicator, the Commodity Channel Index (CCI) shows the current gold market set-up as oversold with the indicator just off multi-month levels. If the market turns lower, the 38.2% Fib retracement at $1,828/oz. looks to be the first level of support.
Gold Price Chart – Daily Chart – February 13, 2023
All Charts via TradingView
| Change in | Longs | Shorts | OI |
| Daily | 7% | 8% | 7% |
| Weekly | 0% | 7% | 2% |
Retail Trader Flows are Mixed
Retail trader data show 64.92% of traders are net-long with the ratio of traders long to short at 1.85 to 1.The number of traders net-long is 9.47% higher than yesterday and 2.49% higher from last week, while the number of traders net-short is 4.64% higher than yesterday and 4.05% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias.
What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
