Daily Analysis: Gold Breaks $1300 as Dollar Hits New Low Again

Monday Market Recap

Asset Current Value Daily Change
S&P 500 2444 0.07%
DAX 12123 -0.37%
WTI Crude Oil 46.80 -2.24%
GOLD 1315.00 1.35%
Bitcoin 4350 -0.60%
EUR/USD 1.1979 0.31%

The Jackson Hole Symposium failed to ignite a bounce in the Greenback, as some of the Dollar bulls were hoping, as the long-term trend in the currency continued today. The EUR/USD pair hit a new high near the 1.20 level during today’s move and the crucial resistance is very likely to be tested in the coming days. Forex markets were all the rage today once again, as stocks traded in a very narrow range throughout the session. The main US indices were slightly higher, while their European peers were pushed lower by the strength of the Euro again. US stocks remain in a precarious situation before the start of September as the overvaluation is now coupled with very weak market internals.

EUR/USD, 4-Hour Chart Analysis

The supply troubles caused by Hurricane Harvey in the Gulf area weren’t enough to lift crude oil price, confirming the weakness of the crucial commodity. The WTI contract actually fell sharply today in early trading, hitting a marginal new 1-month low before recovering somewhat later on. Gold benefited from the weakness of the Dollar as it finally broke through the $1300 level that held back the precious metal for almost a year. Should gold stay above the key level in the coming weeks, a long-term trend change would be confirmed that could ignite a new bull market, and a rally towards $1500.

Gold, 4-Hour Chart Analysis

Cryptocurrencies

Litecoin took center stage in the crypto-segment after a break-out to new highs above the $60 level. As the coin has just moved out of a broad consolidation pattern, the upside potential is still bigger than in the other already overbought majors, such as XMR and Dash. Ripple and Monero are also active yet again today, as the former coin bounced back from below the $0.20 level and surged to $0.25 before settling down above the key $0.22 level, being up by 12%. The other majors are little changed, although Ethereum quietly crept higher to a new 2-month high, as the token continues to climb the wall of worry, with Bitcoinstilll being stuck below $4400.

LTC/USD, 4-Hour Chart Analysis

Technical Picture

The German index is still stuck in a clear downtrend as the European common currency it a new two and a half year high against the Dollar. The DAX continues to trade in the close proximity of the 12,150 level, but as it didn’t hit a new low for two weeks now. The short-term consolidation pattern could soon break, as volatility fell significantly in recent days. A move above 12,250 would signal a test of the 12,375 and 12,500 levels while the continuation of the trend could open up the way to 11,900 or even 11,685 in the coming days.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
10:00 EUROZONE M3 Money Supply 4.5% 4.9% 5.0%

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
14:30 CANADA M3 Money Supply -0.2% -3.7%
16:00 US CB Consumer Confidence Index 120.3 121.1

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Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.