XAUUSD Gold Report: USD Remains A Key Threat To Gold

A small note before starting.

I have not published a detailed XAUUSD Gold Forecast last two weeks. This was because we have entered two short trades at 1347 targeting 1328 and 1323 targeting 1305. Our trades reached their target and it is time to share our view and forecast.

I have published the longer version of our Gold report on our website. Here in tradingview, I like the share the shorter version to make it less boring for "traders". "Non-traders" may read the full version on our website.

A few words from my last forecast published on Feb 2nd.

"As long as the Federal Reserve maintains its new dovish demeanour, we can look for XAUUSD to continue to have strong support and gain or at least hold pricing at current levels 1328.

Upside strong levels: 1350 and 1379. The main trend reversal level is 1379.

We expect a rise to 1.350 and 1.363. Short term ( 1-5 weeks ) and Midterm support ( 1 – 6 months ) are 1277.

We may see a consolidation even a correction towards 1300 $.

Firm closings above 1277 will support the new midterm bullish trend.

Another bearish fundamental may appear in the second quarter of 2019 if we see a decline in inflation in the US. This will make the real interest rates very positive and thus increase the demand to US Bonds."

Now whats the situation:

Stronger U.S. dollar and improving risk sentiment added weight on Gold last week. Gold’s weakness come following data that shows a modestly resilient economy; in particular, on Thursday, data showed that the U.S. economy was stronger than expected in the fourth quarter of 2018. The data have not been as weak or consistent as some economists were expecting, which is supporting renewed momentum in the U.S. dollar and is pushing bond yields lower as investors feel less of a need to hold safe-haven assets.

I have mentioned several times that FED’s dovish stance was not reflecting the US Economy. That’s why Powell’s comments are less dovish lately. Simply saying: Right now the data is starting to challenge the dovish sentiment in the marketplace. ( That’s why we STILL stay SHORT in ***USD and long USD*** currencies excluding GBPUSD)

Right now we are only seeing pockets of weakness, nothing consistent and that will impact rate expectations. We really need to see consistent weaker data to really push rate hikes off the table this year and drive gold prices higher above $ 1.376

DXY / XAUUSD correlation will gain importance soon.


The spotlight next week will be on February’s employment data, which will be released Friday. However, as I have mentioned in my previous USD analysis, the focus is shifting away from how many jobs are created to how fast wages are growing.

XAUUSD broke below 1.300 and ended the week at $ 1.293. The sell of was so strong and the price broke even $1.296 historical level.

As seen on the chart, the price tested $1.289 Fib 38.2 % of the latest rally – CD leg-

Stong bearish candle on the weekly chart is showing that the correction will continue until the price meets Fib 50% at $1.270. However, for the continuation of this sell of $1.289 must be broken first. Breakout of $.1289 could send the prices 1281, 1277 and 1.270.

Under the current fundamentals, I do not see any reason for Gold prices to stay below 1269 and break above 1375.

If DXY breaks above 97.40 and the correlation starts to work in a positive manner, the game may change. We may see the prices breaking below 1.269 and testing 1.250 – 1.243 region. ( This scenario is out of our trading plan at the time being)

Our medium-term strategy is selling GOLD below 1.289 targeting 1.281, 1.277 and 1.269. And start to buy Gold at 1270 targeting 1.300, 1.318, 1.330, 1345.


Looking at the smaller charts, we might see a throwback towards 1.300- 1.305, we plan to use the potential throwbacks as a selling opportunity targeting 1.289,1.281,1277.

Intraday trade setup will be published for the members.