Home Forex Market Analysis Forex Signals Gold On Fire – Two Winning Forex Trading Signals Closed! 

Gold On Fire – Two Winning Forex Trading Signals Closed! 


The yellow metal prices failed to maintain its early-day modest gains and dropped from the $1,932.48 to 1,924.20 level due to the broad-based U.S. dollar modest strength, backed by the downbeat market trading sentiment. However, the gains in the U.S. dollar could be short-lived as the doubts over the U.S. economy persists. On the other hand, the previous market optimism over the coronavirus (COVID-19) vaccine/treatment was overshadowed by the latest disappointing U.S. data. As in result, the market trading sentiment turned negative, which eventually might help the gold prices to limit its deeper losses. 

On the contrary, the on-going optimism related to the US-China trade deal talks remained supportive of the market trading tone that stopped the bullion’s gains. The global economic recovery from COVID-19 turned gloomy after the disappointing U.S. data. At the data front, the August’s Conference Board (C.B.) consumer confidence index dropped to 84.8, it was the lowest level since May 2014, with COVID-19-induced high unemployment contributing to the fall. The data was much weaker than the expected of 93 and was also weaker than July’s figures of 91.7. This data exerted some downside pressure on the market trading sentiment and provided some support to the safe-haven asset.

However, the equity market has started to flash red since the U.S. data released, but the equity market losses were very modest and temporary as the US-China trade optimism helped the market trading tone. The U.S. and Chinese leaders affirmed their commitment to their phase one trade deal on Monday that capped the yellow metal gains. But, both the US-China continued to disagree on other issues that might keep the market cautious. As we all know, the U.S. policymakers have not yet confirmed that when they will start negotiating the COVID-19 aid package. However, the hurdles over the box remain on the card amid multiple differences between both parties.

Also weighing on the safe-haven metal prices could be the reports that suggested the disappearing coronavirus (COVID-19) numbers from the U.S. and Australia. In turn, this decreased the safe-haven demand in the market and kept the gold prices under pressure. Moreover, the U.K. government’s funding for the University of Cambridge’s COVID-19 vaccine trials after the American rush for the pandemic’s cure also kept traders hopeful as treating the deadly virus likely to release soon.

Despite the downbeat U.S. data, the broad-based U.S. dollar extended its early bullish trend on the day amid mixed sentiment in the market. However, the modest gains in the U.S. dollar kept the gold prices under pressure as the price of gold is inversely related to the price of the U.S. dollar. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose 0.05% to 93.062 by 10:15 PM ET (3:15 AM GMT).

Be it the trade/virus updates or the USD moves, not forget the U.S. Durable Goods Orders; these all catalysts will grab the major attention and impact the currency pair. As well as, the traders are keenly awaiting the global central bankers’ comments from the Jackson Hole Symposium, up for Thursday and Friday.

Earlier today, we managed to close two winning signals on gold, and fortunately, we came out of the market a bit early before gold started reversing over the double bottom area of 1,907. The precious metal gold is now trading at 1,937 level, exhibiting a solid bullish turn, and it may find an immediate resistance at 1,938 level. Closing of candles below 1,938 levels may help us secure a quick selling in gold. Elsewhere, the XAU/USD pair may continue to rise until the 1,956 level. Good luck! 


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