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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products.
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Gold buyers return as the dollar changes direction

Gold buyers return as the dollar changes direction

Commodities 5 minutes to read
Ole Hansen

Head of Commodity Strategy

Summary:  Gold has found its footing after last week's selloff, supported by a weaker USD.

Gold trades back above $1300/oz as it continues to recover from the near-5% correction that took it close to, but not through, key support at the $1,275/oz level last week. The bounce that kicked off last Friday following the weak US jobs report is currently being supported by a weaker dollar as another failed attempt to break higher has attracted selling interest. Additional support has come from renewed strength in US bonds in response to softer US CPI and strong demand at yesterday’s 10-year T-Note auction when the yield touched 2.6%, the lowest since early January.    

Having broken back above $1,300/oz, technical traders will now be focusing on the yellow metal's ability to challenge resistance at $1,314/oz and more importantly $1,322/oz. A break above the latter could signal the end of the correction from a technical perspective and mark the beginning of a fresh attempt to challenge the $1,350/oz level. 
Source: Saxo Bank
Gold’s recent trading behaviour has seen funds unsuccessfully chase the market. After buying 44k lots in the run-up to the failed attempt at $1,350/oz, they then dumped 56k lots last week after gold came close to challenging key support at $1,275/oz. Last week, however, the biggest jump in short holdings since July highlighted the risk of a renewed upside squeeze. Investors in exchange traded funds backed by bullion have also returned to the market. Total holdings have started to recover following an almost continuous drop since January 31. 

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, or any of our other products work, and whether you can afford to take the high risk of losing your money. The value of your investments can go down as well as up. Losses can exceed deposits on some margin products. Professional clients can lose more than they deposit. All trading carries risk.

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