Gold Price Forecast: Dollar’s rebound checks the XAU/USD rise, bullish bias still intact
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFER- Gold’s big breakout checked by the resurgent US dollar’s haven demand.
- Risk tone sours on US stimulus uncertainty, election meddling news.
- 50-DMA is the level to beat for the bulls, US Jobless claims data eyed.
Gold (XAU/USD) rallied about 1% on Wednesday and clocked fresh one-week highs at $1932 before retracing slightly to finish the day around $1925. The surge in the yellow demand was fueled by the absence of haven demand for the US dollar. Investors cheered the progress on a likely US fiscal stimulus deal ahead of the election, as President Donald Trump leaned towards a larger aid bill while the White House and Democrats moved closer to an agreement.
However, the tide turned in favor of the dollar bulls towards the mid-American session after Wall Street stocks tumbled on reports that Senate Republicans showed reluctance on approving a multi-trillion-dollar stimulus deal. Gold slipped along with stocks, as the correction continues so far this Thursday. Uncertainty over the next round of stimulus talks creeps in, as President Trump lashed out at the House Speaker Nancy Pelosi after she pushed for a $2 trillion proposal.
Adding to the risk-off mood, US National Intelligence Director and FBI Director warned over Russia and Iran trying to meddle with the November 3 elections. The greenback extends its overnight recovery, keeping gold under pressure. However, any positive development on the stimulus front and or upbeat US jobless claims data could revive the appetite for risk assets, which could likely weigh on the dollar and render gold-supportive.
Gold: Short-tern technical outlook
Daily chart
After a big falling wedge breakout validated on the daily chart on Wednesday, the bulls face a stiff resistance at the 50-daily moving average (DMA) at $1924, at the time of writing.
Therefore, the bullish momentum is likely to regain traction only on a sustained break above the above-mentioned powerful barrier. The next critical resistance is aligned at the October 12 high of $1933.30, beyond which the psychological $1950 level will be put at risk.
The 14-day Relative Strength Index (RSI) has turned lower but holds above the midline at 51.21, suggesting that there is room for further upside.
On the flip side, the 21-DMA at $1898 will continue to guard the downside. A break below the latter could test the 100-DMA support at $1879.
- Gold’s big breakout checked by the resurgent US dollar’s haven demand.
- Risk tone sours on US stimulus uncertainty, election meddling news.
- 50-DMA is the level to beat for the bulls, US Jobless claims data eyed.
Gold (XAU/USD) rallied about 1% on Wednesday and clocked fresh one-week highs at $1932 before retracing slightly to finish the day around $1925. The surge in the yellow demand was fueled by the absence of haven demand for the US dollar. Investors cheered the progress on a likely US fiscal stimulus deal ahead of the election, as President Donald Trump leaned towards a larger aid bill while the White House and Democrats moved closer to an agreement.
However, the tide turned in favor of the dollar bulls towards the mid-American session after Wall Street stocks tumbled on reports that Senate Republicans showed reluctance on approving a multi-trillion-dollar stimulus deal. Gold slipped along with stocks, as the correction continues so far this Thursday. Uncertainty over the next round of stimulus talks creeps in, as President Trump lashed out at the House Speaker Nancy Pelosi after she pushed for a $2 trillion proposal.
Adding to the risk-off mood, US National Intelligence Director and FBI Director warned over Russia and Iran trying to meddle with the November 3 elections. The greenback extends its overnight recovery, keeping gold under pressure. However, any positive development on the stimulus front and or upbeat US jobless claims data could revive the appetite for risk assets, which could likely weigh on the dollar and render gold-supportive.
Gold: Short-tern technical outlook
Daily chart
After a big falling wedge breakout validated on the daily chart on Wednesday, the bulls face a stiff resistance at the 50-daily moving average (DMA) at $1924, at the time of writing.
Therefore, the bullish momentum is likely to regain traction only on a sustained break above the above-mentioned powerful barrier. The next critical resistance is aligned at the October 12 high of $1933.30, beyond which the psychological $1950 level will be put at risk.
The 14-day Relative Strength Index (RSI) has turned lower but holds above the midline at 51.21, suggesting that there is room for further upside.
On the flip side, the 21-DMA at $1898 will continue to guard the downside. A break below the latter could test the 100-DMA support at $1879.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.