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    Gold encounters 100-day SMA, faces downside risks

    © Dukascopy Bank SA
    "For now, the only way to trade gold is to take a view on the equity markets and on the Chinese market in particular, as it seems to be the driving force that is pushing the rest of the space lower."
    - INTL FCStone (based on CNBC)

    Pair's Outlook
    Gold spent another market session in a confident uptrend, as investors attempted to decrease risks in the wake of equity market selloff. A flight to safety pushed XAU/USD as high as 100-day SMA and monthly R2 at 1,107. Positive US fundamentals later on Friday and stock market's stabilization could result in a bearish correction, while short traders are targeting the area below 1,100. A drop below September 2015 low (1,098) is capable of driving prices even deeper down to the next major support cluster at 1,084 (55-day SMA, weekly R2 and monthly R1).  

    Traders' Sentiment
    On Friday around 55% of all SWFX traders are holding bullish market positions, up two percentage points on a daily basis. Therefore, a recent rebound in prices failed to discourage market participants, as they are not fixing profit and are buying the safe-have asset.  

    © Dukascopy Bank SA

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