Gold buyers return as the dollar changes direction Gold buyers return as the dollar changes direction 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. 


Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.