fbpx

A1 Trading

Forex Deep Dive: XAU/USD (Gold) Analysis

March 21, 2021
Frank Cabibi

GOLD- XAU/USD

Fundamental Analysis

This precious metal is considered the safe-haven of the investing world. When fait money like the USD falls in value, it's likely that investors switch up their trading mindset and place bets on gold. And, according to sources on COT reports, big money is switching up their positions a bit and increasing their stake in gold.

COT Reports

Total contracts are at 89.4% long, 53% are non-commercial who are long as well. Similar to the Aussie analysis I wrote last week, there is an overall bullish bias on gold without even looking at retail sentiment just yet. What matters is where these big institutions are placing their money right now, and last week showed them moving into the Buck and gold. Total open interest in the metal saw a +2,596 increase last week which is a good sign that big money is still continuing to put more and more into gold throughout the past couple weeks.

Treasury Yields and Inflation

Bond yields climbed to a high 1.7% last week marking an alarming rise in yield as well as the rate in which it is rising. Although this yield rate doesn't look too concerning, it could be a threat to the price and demand of gold. If yields continue to rise like this, big money might just move over to more bonds, hurting the stock market as well.

Powell also suggested in his statement last week that the Fed will let keep letting inflation climb if need be. They will also let the Supplementary Leverage Ratio expire on March 31, which I think basically means that the Fed will have to hold more capital and have to limit their assets. This is definitely something to look at for the weeks ahead to see what this could do to gold and the stock market as well.

Technical Analysis

Gold 1D chart

On the daily chart, gold is still struggling to break out of that heavy resistance level around the 1740s, but continues to test it. Mid-2020 lows proved to be a considerable zone of support which is a good sign for bulls as price hovers in between heavy support and resistance. This level could be a key area to break if we are looking for a major breakout. The 1740s level should be significant enough to cause serious momentum to the upside upon a break.

Retail Sentiment

Right now, 57% of retail traders are long gold showing a majority that are bullish.

The EdgeFinder

All-in-one Fundamental Dashboard

30 Days Access

Free Telegram

Join for daily analysis and trade setups!

Join Telegram

DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals

A1 Trading Company

A1 Trading is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
2024 All Rights Reserved | A1 Trading Company
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonecross-circle
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram