[Video] Gold Performs A U Turn At The YTD Highs

Gold's strong rally came to an abrupt end just shy of the 2019 high, thanks to a broadly stronger USD. Whilst we think it will continue its rally, we're looking for a little mean reversion first.


  • Whilst gold is up just a modest 3.9% this year, it’s rallied 14.8% since the 2018 low and the trend structure remains bullish. Furthermore, by yesterday’s close the shiny yellow metal had racked up its most bullish 4-day run since June 2016 to underscore its recent pickup of bullish momentum.
  • The main culprit for gold’s impressive display is thanks to Donald Trump’s latest threat of tariffs on Mexican goods. Not only is gold receiving safe-haven flows, but its move higher has also been supported by a weaker USD. Markets seem wary as to whether Trump can fight a trade war on two fronts (Mexico and China) which has seen the US dollar suffer.
  • However, stopping just shy of the 2019 high, a solid reversal for the US dollar yesterday has left a large bearish hammer below key resistance. That its occurred whilst being overextended from it upper Keltner band strongly suggests the move is exhausted over the near-term. Therefor we expect prices to retrace or consolidate before gold eventually breaks to new highs.


Recent Videos: 
70c Remains Pivotal For AUD/USD Post-RBA
USD/JPY Bears Looking To Fade Rallies Below 109


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.