Currently, gold (XAU/USD) is trading at $1,228, having hit a one year low of $1,226 earlier today. Should traders expect a deeper drop in price? Learn this from the following 18 July Gold Price Technical Forecast.
18 July, GKFX – The yellow metal ran into offers during the overnight trade and fell below the key support of $1,234 (50-month MA) as Fed’s Powell’s Senate testimony was mostly upbeat, driven by positive trends in labor market, inflation and economic growth.
Should traders expect a deeper drop in price?
The Fed head added words “for now” while discussing Fed’s plans to gradually raise interest rates, to indicate that the central bank is not on autopilot. However, the caveat failed to put a bid under the yellow metal.
Further, the solid demand for gold puts indicates the investors are likely expecting a deeper drop in the safe haven yellow metal.
At press time, the one-month 25 delta risk reversals are being paid at -0.8 XAU puts – the lowest level since December 22. The negative number indicates the implied volatility premium
(or demand) for gold puts is higher than that of gold calls.
18 July Gold Price Technical Forecast
Resistance: $1,234 (50-month MA), $1,245 (10-day MA), $1,247 (200-hour MA)
Support: $1,226 (overnight low), $1,214 (May 2017 low), $1,200 (psychological level)
This article 18 July Gold Price Technical Forecast was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.