Gold Price (XAU/USD), Chart, and Analysis
- Gold remains highly volatile going into the weekend.
- Gold is below the 20-day simple moving average.
The ongoing crisis in Ukraine continues to fuel volatility in the gold market with the 14-day Average True Range indicator underpinned at highs last seen 18 months ago. Talks between Russia and Ukraine continue but with little common ground seen so far, volatility is set to remain elevated in the near future leaving the price of gold vulnerable to further sharp swings. Traders need to factor in volatility levels before entering any trade, especially short-term traders with the weekend coming up.
Another technical indicator is now in play with gold seemingly stuck below the 20-day simple moving average for the first time in five weeks. Gold tested, and rejected, the 20-dsma yesterday around the $1,950/oz. and this looks likely to remain as a short-term price cap during today’s session.
Looking further ahead, the chart suggests that gold is likely to struggle to regain the recent spike-high at $2,070/oz. The recent $200 sell-off has only been partially retraced and looks like a minor bull pull back within a deeper bear market move. Barring any escalation between Russia and Ukraine, the $1,960/oz to $1,966/oz. zone made from two swing highs back in November 2020 and January 2021 should act as the next zone of resistance if the 20-dsma is breached.
Gold Daily Price Chart – March 18, 2022
Retail trader data show 75.72% of traders are net-long with the ratio of traders long to short at 3.12 to 1. The number of traders net-long is 0.17% lower than yesterday and 4.58% higher from last week, while the number of traders net-short is 8.37% higher than yesterday and 11.78% lower 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 less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias.
What are your views 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.