During lower volume Asian trading today gold (XAU/USD) turned bullish and is currently trading at 1723. Lately the biggest influence on the gold price is the ongoing uncertainty over the U.S. budget talks and therefore I expect the main element effecting gold prices in coming days will likely to be investors' concern about the U.S. fiscal situation. Although the recent reports show that global gold demand fell in the third quarter, the precious metal should continue to strengthen in the longer time frame as several central banks around the world continue to ease monetary policy. On the daily time frame, XAU/USD remains trapped in the Ichimoku cloud but Tenkan-sen line (nine-period moving average, red line) is about to cross above the Kijun-sen line (twenty six-day moving average, green line), indicating the bulls are regaining strength.

On the 4 hour time frame, XAU/USD pair is trying to break out of the descending channel which it has been running in since November 9. If price breaks through 1726, gold is likely to maintain bullish trend and head for a test of previous week's high of 1738.90. On its way up, the bears will be waiting at 1730 and 1734. On a break above 1739, we would open up the door to 1750. If the bears win the fight and XAU/USD reverses, the 1715, 1710.30 and 1705.74 will all be potential support levels.

Related Articles
  1. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  2. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  3. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  4. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  5. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  6. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  7. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  8. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  9. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  10. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.

You May Also Like

Trading Center