Gold Price (XAU/USD) Analysis, Price, and Chart
- Gold volatility is stuck at multi-month lows.
- US inflation data is the next driver for gold.
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The precious metal is having a quiet start to the week with spot gold trading on either side of $1,920/oz. so far today. Gold volatility is currently sitting at a multi-month low, while the CCP indicator shows that gold is neither overbought or oversold. This may change mid-week however when the latest US inflation data is released. US core inflation is expected to fall to 5% from 5.3% in May y/y, while headline inflation is seen falling to 3.1% from 4% last month. Headline inflation hit a multi-decade high rate of 9.1% in June last year. A sharp fall in inflation, if it happens, would take the pressure off the Federal Reserve to tighten monetary policy further.
US Headline Inflation
Chart via Trading Economics.
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Gold remains trapped below a zone of resistance between $1,933/oz. and $1,940/oz. This short-term zone has held gold at bay for the last month with each attempted break higher thwarted as sellers reappear. The downward-sloping 20-day simple moving average, currently at $1.926.61, is also pushing down on the price of gold. Support is provided by the 38.2% Fibonacci retracement level at $1,903/oz and by the big figure $1,900/oz. price point. Below here sits the 200-dma at $1,868.76.
Gold Daily Price Chart – July 10, 2023
Chart via TradingView
| Change in | Longs | Shorts | OI |
| Daily | 5% | 0% | 3% |
| Weekly | -3% | 2% | -1% |
Retail Traders Remain Long of Gold
Retail trader data show 70.49% of traders are net-long with the ratio of traders long to short at 2.39 to 1.The number of traders net-long is 6.02% higher than yesterday and 6.22% lower than last week, while the number of traders net-short is 6.79% higher than yesterday and 9.53% higher than 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. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.
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.
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