Gold Price Forecast: XAU/USD bulls take a breather, await ECB for additional upside?
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 in a bullish consolidation phase, clings to 21-DMA.
- US stimulus hopes, tech rally and ECB optimism down the dollar.
- Bullish Doji reversal points to more gains but ECB could be a risk.
Gold (XAU/USD) closed higher for the second straight day on Wednesday, having staged a solid $30 bounce intraday. Gold bounced along with the US stocks amid improved market mood, which diminished the haven demand for the US dollar. The tech rally resumed after the recent correction, driving the Wall Street indices northwards. Further, the Bloomberg report citing that the European Central Bank (ECB) forecasts leak showed more confidence in the outlook boosted the euro at the expense of the greenback. Meanwhile, expectations that the US Congress will reach the much-awaited fiscal stimulus deal lifted the metal, as markets looked past news that AstraZeneca halted its vaccine trials over safety concerns.
All eyes now remain on the ECB monetary policy decision due later on Thursday amid increased dovish expectations, which could benefit the yieldless gold. The central bank is likely to stand pat on its policy, although could leave doors open for stimulus expansion in its December meeting amid negative inflation and concerns over the euro strength. A dovish ECB outcome could bode well for the equities and exacerbate the pain in the dollar, in turn, rendering gold-supportive.
Gold: Daily chart
The bulls remain hopeful, although acceptance above the falling trendline (symmetrical triangle) resistance at $1958 is needed to extend the bullish reversal. A break above the last could open doors towards Sept 2 high of $1973.34.
Meanwhile, the bullish bias will likely remain intact so long as the price holds above the robust cap around $1916-$1910, where the upward-sloping 50-DMA and rising trendline support coincide.
The 14-day Relative Strength Index (RSI) trades flat but holds above the midline, supporting the case for the further upside.
- Gold in a bullish consolidation phase, clings to 21-DMA.
- US stimulus hopes, tech rally and ECB optimism down the dollar.
- Bullish Doji reversal points to more gains but ECB could be a risk.
Gold (XAU/USD) closed higher for the second straight day on Wednesday, having staged a solid $30 bounce intraday. Gold bounced along with the US stocks amid improved market mood, which diminished the haven demand for the US dollar. The tech rally resumed after the recent correction, driving the Wall Street indices northwards. Further, the Bloomberg report citing that the European Central Bank (ECB) forecasts leak showed more confidence in the outlook boosted the euro at the expense of the greenback. Meanwhile, expectations that the US Congress will reach the much-awaited fiscal stimulus deal lifted the metal, as markets looked past news that AstraZeneca halted its vaccine trials over safety concerns.
All eyes now remain on the ECB monetary policy decision due later on Thursday amid increased dovish expectations, which could benefit the yieldless gold. The central bank is likely to stand pat on its policy, although could leave doors open for stimulus expansion in its December meeting amid negative inflation and concerns over the euro strength. A dovish ECB outcome could bode well for the equities and exacerbate the pain in the dollar, in turn, rendering gold-supportive.
Gold: Daily chart
The bulls remain hopeful, although acceptance above the falling trendline (symmetrical triangle) resistance at $1958 is needed to extend the bullish reversal. A break above the last could open doors towards Sept 2 high of $1973.34.
Meanwhile, the bullish bias will likely remain intact so long as the price holds above the robust cap around $1916-$1910, where the upward-sloping 50-DMA and rising trendline support coincide.
The 14-day Relative Strength Index (RSI) trades flat but holds above the midline, supporting the case for the further upside.
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.