Gold Price Forecast: 50 DMA appears a tough nut to crack for XAU/USD bulls ahead of US data
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UNLOCK OFFER- Gold price is pausing its rally, as the dollar perks up ahead of key US data.
- Treasury yields also see renewed uptick amid the return of aggressive Fed rate hike bets.
- XAU/USD needs clearance of the 50 DMA for a move towards $1,750.
Gold price is fading its bullish momentum this Wednesday, as it eases from three-week highs of $1,730 amid resurgent safe-haven demand for the US dollar. The greenback is drawing support from the revival in the bets for aggressive Fed tightening after the RBNZ delivered a hawkish rate hike and poured cold water on investors’ expectations for a slowdown in the Fed’s rate hike pace. The same is being translated into higher Treasury yields across the curve, curbing the appeal of the non-yielding bullion. Markets are now eagerly awaiting the US employment data and the ISM Services PMI to gauge the strength of the economy, which could have a significant impact on the size of the next Fed rate hikes. The US private sector is expected to add 200K jobs in September while the closely watched ISM Services Price Paid component is expected to ease to 69.8 in the reported period.
Also read: Gold Price Forecast: XAU/USD faces a wall of resistance ahead of key US events – Confluence Detector
XAU/USD extended its winning streak into the second straight day on Tuesday and reached the highest level since September 13, as the US dollar correction picked up steam following the release of the JOLTS Job Openings data. Fears over US economic slowdown resurfaced and weighed on aggressive Fed tightening bets after US job openings plunged to 10.1 million in August, the lowest since June 2021. Stocks jumped while yields dropped after the report, underpinning the non-interest-bearing gold price.
Gold price technical outlook: Daily chart
Gold price took advantage of the upside break of the falling trendline resistance at the start of the week and extended its upsurge beyond $1,700.
However, the bearish 50-Daily Moving Average (DMA) at $1,724 played a spoilsport and tempered its rally.
At the time of writing, the bright metal is struggling with the 50 DMA barrier, as the 14-day Relative Strength Index (RSI) has turned south despite being above the midline.
The pullback in the bullion appears temporary, as the technical setup continues to favor bulls.
A sustained break above the 50 DMA is needed to challenge the September highs at $1,735, above which the $1,750 psychological level will come into play.
On the downside, the previous critical ressitance now support at $1,700 could offer temporary reprieve to buyers, below which the the previous day’s low of $1,695 could be revisited.
Powerful support at $1,680 will be the last line of defense for gold bulls. That level is the confluence of the mildly bullish 21 DMA and the falling trendline resistance-turned-support.
- Gold price is pausing its rally, as the dollar perks up ahead of key US data.
- Treasury yields also see renewed uptick amid the return of aggressive Fed rate hike bets.
- XAU/USD needs clearance of the 50 DMA for a move towards $1,750.
Gold price is fading its bullish momentum this Wednesday, as it eases from three-week highs of $1,730 amid resurgent safe-haven demand for the US dollar. The greenback is drawing support from the revival in the bets for aggressive Fed tightening after the RBNZ delivered a hawkish rate hike and poured cold water on investors’ expectations for a slowdown in the Fed’s rate hike pace. The same is being translated into higher Treasury yields across the curve, curbing the appeal of the non-yielding bullion. Markets are now eagerly awaiting the US employment data and the ISM Services PMI to gauge the strength of the economy, which could have a significant impact on the size of the next Fed rate hikes. The US private sector is expected to add 200K jobs in September while the closely watched ISM Services Price Paid component is expected to ease to 69.8 in the reported period.
Also read: Gold Price Forecast: XAU/USD faces a wall of resistance ahead of key US events – Confluence Detector
XAU/USD extended its winning streak into the second straight day on Tuesday and reached the highest level since September 13, as the US dollar correction picked up steam following the release of the JOLTS Job Openings data. Fears over US economic slowdown resurfaced and weighed on aggressive Fed tightening bets after US job openings plunged to 10.1 million in August, the lowest since June 2021. Stocks jumped while yields dropped after the report, underpinning the non-interest-bearing gold price.
Gold price technical outlook: Daily chart
Gold price took advantage of the upside break of the falling trendline resistance at the start of the week and extended its upsurge beyond $1,700.
However, the bearish 50-Daily Moving Average (DMA) at $1,724 played a spoilsport and tempered its rally.
At the time of writing, the bright metal is struggling with the 50 DMA barrier, as the 14-day Relative Strength Index (RSI) has turned south despite being above the midline.
The pullback in the bullion appears temporary, as the technical setup continues to favor bulls.
A sustained break above the 50 DMA is needed to challenge the September highs at $1,735, above which the $1,750 psychological level will come into play.
On the downside, the previous critical ressitance now support at $1,700 could offer temporary reprieve to buyers, below which the the previous day’s low of $1,695 could be revisited.
Powerful support at $1,680 will be the last line of defense for gold bulls. That level is the confluence of the mildly bullish 21 DMA and the falling trendline resistance-turned-support.
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