(MENAFN- DailyFX) Gold Price Outlook Talking Points: Gold pricesput in a strong day of price action yesterday, going along with a number of key risk markets afterFOMC Chair Jerome Powell took on a dovish tonein yesterday's remarks on Capitol Hill. This helped a number of key risk markets post strong bullish moves, including theS & P 500crossing above the 3k barrier. More interestingly,Gold priceshave so far pulled up short of their prior highs, indicating that Gold bulls might not yet be ready to push prices up to a fresh six-year high-watermark. DailyFX Forecasts are published on a variety of markets such asGold , theUS Dollarorthe Euroand are available from theDailyFX Trading Guides page . If you're looking to improve your trading approach, check outTraits of Successful Traders . And if you're looking for an introductory primer to the Forex market, check out ourNew to FX Guide . Gold Prices Glitter After Powell Comments
Gold bulls posed another topside push yesterdayon the heels of some dovish comments fromFOMCChair, Jerome Powell. This helped Gold prices to push back above the 1400 marker after a two-week pullback from the fresh six-year-highs that were set in late-June. Yesterday's risk rally was fairly wide-spread, with global stocks catching a bid as the S & P 500 set a fresh all-time-high above the psychological 3k level. Noticeably, however, that bullish theme in Gold prices was a bit more subdued as buyers pulled back short of last week's swing-high, showing resistance in a key zone on the chart that's thus far been able to restrain the advance. This indicates that more digestion of the late-Q2 breakout may be in order before buyers are ready for fresh highs in the yellow metal.
Gold Weekly Price Chart
Chart prepared byJames Stanley
Taking a closer look on the chart, and this recent round of digestion can make sense as part of the bigger picture. Yesterday's lower-high is coupled with a higher-low that showed-up on Tuesday has led into a symmetrical wedge pattern. Given the prior bullish trend, this shows as a bull pennant formation, which offers a bit of bias potential to that otherwise non-directional symmetrical wedge.This can keep emphasis on the bullish side of Goldfor as long as prices remain above trend-line support.
Gold Price Eight-Hour Price Chart
Chart prepared byJames Stanley
Gold Price Strategy
Timing is of importance here and given the lack of fresh highs in Gold as risk markets elsewhere were showing significant gains, there remains potential for an extension of consolidation. At this stage, Goldprice actionis testing below the 14.4%Fibonacci retracementof last month's bullish move while also seeing resistance at a key area on the chart. For those that want to retain an aggressive stance, expecting a near-term breakout, this may be a usable support level if buyers can hold the line through today's trade. However, a bit deeper is another area of interest of that same theme that could allow for a bit more of a prudent approach, and this comes in around that 1400 psychological level, which is confluent with the 23.6% retracement of that same major move.
On a longer-term basis, or for traders that would prefer to take a further step back, bigger-picture support potential remain at the same zones looked at last week; taken from the 38.2% and 50% markers of that recent major move, each of which offers a bit of confluent support potential on the chart.
Gold Price Two-Hour Chart
Chart prepared byJames Stanley
To read more:
Are you looking for longer-term analysis on the U.S. Dollar? OurDailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources onGoldorUSD -pairs such asEUR/USD ,GBP/USD ,USD/JPY ,AUD/USD . Traders can also stay up with near-term positioning via ourIG Client Sentiment Indicator .
Forex Trading Resources
DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, ourIG Client Sentimentshows the positioning of retail traders with actual live trades and positions. Ourtrading guidesbring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and ourreal-time news feedhas intra-day interactions from the DailyFX team. And if you're looking for real-time analysis, ourDailyFX Webinarsoffer numerous sessions each week in which you can see how and why we're looking at what we're looking at.
If you're looking for educational information, ourNew to FX guideis there to help new(er) traders while ourTraits of Successful Traders researchis built to help sharpen the skill set by focusing on risk and trade management.
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter:@JStanleyFX
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