XAU/USD May Continue its Slow and Steady Upward Momentum.
Gold, XAU/USD, University of Michigan Sentiment, IGCS, Analysis – Talking Points:
Gold prices rose slightly, trying to rebound from the previous downturn. Weak sentiment data from the University of Michigan may push up XAU/USD Retail traders reduce gold exposure, IGCS hints that prices may rise
On Thursday, the anti-statutory gold price was cautiously higher, although the price movement was fairly moderate. Gold is still slowly recovering from the sudden crash earlier this week. Treasury bond yields have risen, but the U.S. dollar is still quite weak. XAU/USD may make more use of the latter’s price action than the former.
Looking at the remaining 24 hours of the week, gold will turn to the sentiment data of the University of Michigan after the Asia-Pacific trading hours are fairly quiet. According to the Citi Economic Surprise Index, economists now tend to overestimate the health and vitality of the economy. This may open the door for smoother reporting than expected. If such results affect US bond yields, then gold may continue its slow and steady bullish momentum.
Gold Technical Analysis
XAU/USD seems to have confirmed the bullish morning star candlestick pattern on the daily chart below. This may indicate that more profits will be made in the next few trading days. However, keep in mind that the bearish “death cross” still works between the 20-day and 50-day simple moving average (SMA). These may re-establish the downside dominant method as a key resistance point.
XAU/USD Daily Chart
Gold Sentiment Analysis
According to IG Client Sentiment (IGCS), approximately 72% of retail traders are long-term net gold. Daily and weekly upside risks have been reduced by 1.55% and 7.15%, respectively. Usually our views are contrary to the mood of the masses. The net long positions of most traders indicate that prices may continue to fall. However, recent changes in sentiment now warn that price trends may soon reverse upward.
*IGCS chart used from August 13th report
–— Written by Daniel Dubrovsky, Strategist for DailyFX