Gold price: A key week could therefore be imminent!

Gold Price Fixed

The price of gold has recently recovered slightly, even though the USD 1,500 mark has not yet been regained. Next week may be interesting in this regard. Let’s first look at the latest developments. The current CoT data from trading gold futures on the US commodity futures exchange COMEX show the following changes in the positions of the largest trading groups as of October 15, 2019.

 

CoT data

The net short position of the “Commercials” fell by 7 per cent to 288,275 contracts compared to the previous week. On the other hand, the net long position of the “big speculators” declined by 8 per cent to 253,027 contracts. Open interest, i.e. the sum of all open contracts on COMEX, fell by 1.55 percent to 607,387 contracts compared to the previous week. By the close of trading yesterday, Friday, the volume had risen again by 2.3 percent to 621,487 contracts. Last week, the price of gold rose by 0.1 percent to 1,490 US dollars per ounce (equivalent to 1,332 euros). The gold futures market thus recently outweighed slight market strength.

 

Brexit advice

Today, Saturday, the British Parliament will discuss the revised Brexit deal. The vote will take place in the early evening at the latest. The House of Commons decision could then have a significant impact on the markets at the beginning of the new week. The more uncertainty results from the meeting result, the more critical it becomes probably for the European stock markets. The gold price is the counterposition.

 

New trade war

After the trade war between the USA and China eased slightly with an interim deal, US President Trump is now tightening the reins on the European Union. On Friday, punitive tariffs of 25 percent were imposed on numerous foodstuffs and 10 percent on aircraft imports. It concerns goods with a value of up to 7.5 billion US dollars. And there are already US threats regarding punitive tariffs on European cars. Representatives of the European Union want to respond with counter-tariffs. The situation could escalate in the same way as in the case of China. This aspect could also play a role in the markets. Meanwhile, the ECB meeting next week could have an impact on the euro-dollar exchange rate and thus disproportionately on the gold price calculated in euros.

 

Chart technique

From a chart technical point of view, the gold price has recently strengthened slightly. After reaching a 2-month low of 1,472 US dollars/ounce at the end of September, a small upward trend has now established itself again. A sustained return above the USD 1,500 threshold would be an important step towards a new upswing. The possible jump above the USD 1,520 level (edge of the 6-week downtrend) could then serve as a signal for the resumption of the gold rally.