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Gold Prices, S&P 500, DAX Index at Critical Turning Points

Gold Price Forecast, S&P 500 Outlook, DAX Index Analysis – TALKING POINTS

  • Gold prices could start retreating as XAU/USD tests key support
  • S&P 500 is re-mounting the October uptrend – but will it hold?
  • DAX flirting with 2018 high but capitulation may catalyze selloff

GOLD PRICE CHART

After breaking the late-December uptrend that formed shortly after gold prices broke out of the September descending resistance channel, XAU/USD is now on the cusp of a familiar but critical support zone. Breaking below the lower tier of the 1551.96-1557.10 (gold-dotted lines) range opens the door to testing a floor at 1535.69 (white-dotted line).

Gold Prices – Daily Chart

Chart showing XAU/USD

XAU/USD chart created using TradingView

From a fundamental perspective, the path of least resistance supports the case for a continuation of the bearish correction. Conversely, if XAU/USD bounces back from this range, the precious metal’s rise may stall at a familiar ceiling at 1576.90 (white-dotted line). To get more updates on gold, be sure to follow me on Twitter @ZabelinDimitri.

Gold Prices – Daily Chart

Chart showing XAU/USD

XAU/USD chart created using TradingView

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S&P 500 FORECAST

The S&P 500 has found itself at a critical three-way price intersection between resistance-now-turned support at 3325, a floor at 3293.75 and the prior uptrend. Re-aligning the equity index’ proverbial wheels on the previous track may precede a turn higher if it reinforces bullish sentiment. However, negative RSI divergence is showing upside momentum is fading right as the S&P 500 is approaching new highs.

S&P 500 – Daily Chart

Chart showing S&P 500

DAX index chart created using TradingView

DAX INDEX ANALYSIS

After shattering the October 2019 uptrend, the DAX fell almost two percent before bouncing back above the 12886.55-12948.17 support range. It is now approaching a critical price juncture between the prior uptrend and 2018-high at 13596.89 which it briefly tested before it capitulated. Failure to clear the prior ceiling may inspire liquidation if traders believe its upside potential – at least for now – is capped at the 2018-high.

DAX Index – Daily Chart

Chart showing DAX Index

DAX index chart created using TradingView

GOLD TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter