Gold Price Forecast: 50 DMA at $1,932 remains a tough nut to crack for XAU/USD buyers
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UNLOCK OFFER- Gold price stays supported above the key 200 DMA after closing the week above.
- US Dollar bulls take a breather, as key central banks’ policy decisions hold the key.
- Gold price awaits a fresh catalyst to recapture the 50 DMA barrier amid bullish RSI.
Gold price is looking to the ongoing recovery from multi-week lows, kicking off a central banks-dominated week. A broad-based subdued United States Dollar (USD) performance is aiding the latest leg higher in Gold price.
Gold price extends China-driven recovery rally
Gold price is holding higher ground toward $1,930 early Monday, undermined by a modest pullback in the US Dollar—a sluggish action in the US Treasury bond yields amid a holiday in Japan. Further, investors resort to position readjustments ahead of the critical monetary policy decisions due to be announced this week by the US Federal Reserve (Fed), the People’s Bank of China (PBOC), the Bank of England (BoE) and the Bank of Japan (BoJ).
The start of a key central banks’ week has prompted thin ranges across the FX board while China’s property market concerns continue to weigh on risk sentiment, keeping the buoyant tone intact around the traditional safe-haven Gold price. Shares of embattled developer China Evergrande Group dropped as much as 25% in early dealings after Chinese police detained some staff from the company’s wealth management unit, suggesting a new investigation that could add to the property giant's woes.
Another piece of news from China is also boding well for Gold price. Reuters reported that “Chinese gold prices hit record highs last week, extending a months-long rally as consumers snap up the safe-haven asset to offset a depreciating Yuan. Physical gold premiums also soared to new highs amid a lack of fresh import quotas.”
Later in the day, risk sentiment will continue to play a pivotal role in Gold price action in the absence of top-tier US economic data releases on Monday. Gold price could likely remain supported on expectations that the Federal Reserve is likely to stand pat on interest rates this Wednesday while the BoE is set to announce its last rate hike on Thursday, as the economy teeters on the brink of a recession.
Gold price technical analysis: Daily chart
Gold price yielded a weekly close above the all-important 200-Daily Moving Average (DMA) at $1,922 on Friday, opening doors for more gains.
However, Gold buyers need to scale a powerful resistance aligned at $1,1932, the 50 DMA, to confirm a bullish reversal from three-week lows.
The psychological $1,950 level will be next on Gold buyers’ radars. Ahead of that, the downward-sloping 100 DMA at $1,946 could protect the upside.
Alternatively, Gold price could see a pullback toward the 200 DMA at $1,922 if it fails to reclaim the 50 DMA barrier at $1,932. At that level, the 21 DMA coincides.
A firm break below the confluence support area is needed for Gold sellers to aim for the $1,900 threshold once again. A fresh downtrend toward the static support at $1,885 cannot be ruled out should the latter give way.
The 14-day Relative Strength Index (RSI) indicator is inching higher, having regained the 50 level on Friday, keeping Gold buyers hopeful.
- Gold price stays supported above the key 200 DMA after closing the week above.
- US Dollar bulls take a breather, as key central banks’ policy decisions hold the key.
- Gold price awaits a fresh catalyst to recapture the 50 DMA barrier amid bullish RSI.
Gold price is looking to the ongoing recovery from multi-week lows, kicking off a central banks-dominated week. A broad-based subdued United States Dollar (USD) performance is aiding the latest leg higher in Gold price.
Gold price extends China-driven recovery rally
Gold price is holding higher ground toward $1,930 early Monday, undermined by a modest pullback in the US Dollar—a sluggish action in the US Treasury bond yields amid a holiday in Japan. Further, investors resort to position readjustments ahead of the critical monetary policy decisions due to be announced this week by the US Federal Reserve (Fed), the People’s Bank of China (PBOC), the Bank of England (BoE) and the Bank of Japan (BoJ).
The start of a key central banks’ week has prompted thin ranges across the FX board while China’s property market concerns continue to weigh on risk sentiment, keeping the buoyant tone intact around the traditional safe-haven Gold price. Shares of embattled developer China Evergrande Group dropped as much as 25% in early dealings after Chinese police detained some staff from the company’s wealth management unit, suggesting a new investigation that could add to the property giant's woes.
Another piece of news from China is also boding well for Gold price. Reuters reported that “Chinese gold prices hit record highs last week, extending a months-long rally as consumers snap up the safe-haven asset to offset a depreciating Yuan. Physical gold premiums also soared to new highs amid a lack of fresh import quotas.”
Later in the day, risk sentiment will continue to play a pivotal role in Gold price action in the absence of top-tier US economic data releases on Monday. Gold price could likely remain supported on expectations that the Federal Reserve is likely to stand pat on interest rates this Wednesday while the BoE is set to announce its last rate hike on Thursday, as the economy teeters on the brink of a recession.
Gold price technical analysis: Daily chart
Gold price yielded a weekly close above the all-important 200-Daily Moving Average (DMA) at $1,922 on Friday, opening doors for more gains.
However, Gold buyers need to scale a powerful resistance aligned at $1,1932, the 50 DMA, to confirm a bullish reversal from three-week lows.
The psychological $1,950 level will be next on Gold buyers’ radars. Ahead of that, the downward-sloping 100 DMA at $1,946 could protect the upside.
Alternatively, Gold price could see a pullback toward the 200 DMA at $1,922 if it fails to reclaim the 50 DMA barrier at $1,932. At that level, the 21 DMA coincides.
A firm break below the confluence support area is needed for Gold sellers to aim for the $1,900 threshold once again. A fresh downtrend toward the static support at $1,885 cannot be ruled out should the latter give way.
The 14-day Relative Strength Index (RSI) indicator is inching higher, having regained the 50 level on Friday, keeping Gold buyers hopeful.
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