Gold Price Forecast: XAU/USD extends its weekly slide
|XAU/USD Current price: $1,978.21
- United States employment-related data pointed to a still tight labor sector.
- The Federal Reserve is widely anticipated to keep rates on hold for a second month in a row.
- XAU/USD gains near-term bearish traction could fall towards $1,947 in the Fed’s aftermath.
Spot Gold hovers around $1,980 a troy ounce, reverting an early spike to $1,992.02. The US Dollar trades with a firm tone ahead of the long-awaited United States (US) Federal Reserve (Fed) monetary policy announcement. The central bank is expected to hold rates steady for a second consecutive meeting after forcefully pushing the benchmark rate to 5.5%, an over two-decade high.
The Greenback shed some ground early in the American session following the release of critical US data. s. The ADP survey on job creation showed that the private sector added 113K new positions in the month, below the 150K expected but higher than the previous 89K. Also, the number of job openings changed little at 9.6 million on the last business day of September, according to the US Bureau of Labor Statistics (BLS), ticking higher from the 9.59 million openings in August, also above the market’s expectations of 9.25 million. Additionally, the October Manufacturing PMI printed at 46.7 in October, declining from the previous 49.
However, the USD quickly regained the ground lost as stock markets trimmed early gains in preparation for the central bank announcement. Finally, government bond yields are in retreat mode after the Treasury announced upcoming auction sizes of $112 billion, slightly below the $114 billion anticipated by financial markets. The Treasury also announced plans to increase auction sizes one more time.
XAU/USD short-term technical outlook
The daily chart for XAU/USD shows it posted a lower low and a lower high and trades in the red for the third consecutive day. Still, the slump seems corrective as technical indicators are losing their bearish strength after correcting overbought conditions while developing well above their midlines. Furthermore, Gold keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) crossing above the 100 and 200 SMAs.
In the near term, and according to the 4-hour chart, however, XAU/USD is poised to extend its decline. A flat 20 SMA provides intraday resistance ahead of the $2,000 threshold, while technical indicator resumed their slide within negative levels. The 100 SMA maintains its bullish slope far below the current level, at around $1,947.65, a potential bearish target should the US Dollar soar with the Fed’s news.
Support levels: 1,974.50 1,962.10 1,947.55
Resistance levels: 1,992.10 2,009.50 2,023.70
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