© Dukascopy Bank SA
"For now, the only way to trade gold is to take a view on the equity markets and on the Chinese market in particular, as it seems to be the driving force that is pushing the rest of the space lower."
- INTL FCStone (based on CNBC)
Pair's Outlook
Gold spent another market session in a confident uptrend, as investors attempted to decrease risks in the wake of equity market selloff. A flight to safety pushed XAU/USD as high as 100-day SMA and monthly R2 at 1,107. Positive US fundamentals later on Friday and stock market's stabilization could result in a bearish correction, while short traders are targeting the area below 1,100. A drop below September 2015 low (1,098) is capable of driving prices even deeper down to the next major support cluster at 1,084 (55-day SMA, weekly R2 and monthly R1).
Traders' Sentiment
On Friday around 55% of all SWFX traders are holding bullish market positions, up two percentage points on a daily basis. Therefore, a recent rebound in prices failed to discourage market participants, as they are not fixing profit and are buying the safe-have asset.
© Dukascopy Bank SA