Gold Price Forecast: XAU/USD maintains the positive tone above $1,920
|XAU/USD Current price: $1,923.82
- Signs of easing global inflation underpinned the market mood on Tuesday.
- Upbeat United States data pushed Wall Street to fresh weekly highs.
- XAU/USD maintains its bullish stance but still needs to surpass $1,932.60.
Spot Gold trades around $1,923 a troy ounce, recovering the ground lost on Monday and posting a fresh weekly high of $1,9131.57, still below last week’s peak. The US Dollar turned lower during American trading hours as upbeat United States (US) data boosted the mood. Wall Street shrugged off the negative tone of its European counterparts and extended Monday’s rally amid encouraging earnings reports. On the other hand, government bond yields are on the rise, with the 10-year Treasury note offering 4.80%, up 9 basis points (bps) in the day, somehow limiting the USD decline.
The US published September Retail Sales, which were up by 0.7%, much better than the 0.3% anticipated by financial markets. Additionally, Capacity Utilization improved to 79.7% in the month, while Industrial Production was up by 0.3%, beating expectations. Fi ally, August Business Inventories rose 0.4%, slightly worse than the 0.3% expected.
Meanwhile, news that global inflation may have resumed its decline underpinned the mood. New Zealand reported that the Q3 Consumer Price Index (CPI) was 5.6%, decreasing from 6% in Q2 and below the 5.9% anticipated by market participants. Also, Canada informed that the CPI declined 0.1% MoM in September and hit 3.8% YoY, easing from the previous 4%. The United Kingdom will post an inflation update on Wednesday.
XAU/USD short-term technical outlook
The daily chart for XAU/USD shows the risk skews to the upside, although the pair needs to clear $1,932.60, last week’s high. XAU/U D trades around a flat 100 SMA, while a directionless 200 SMA stands around the aforementioned high, reinforcing the resistance level. At the same time, the Momentum indicator heads firmly north within positive levels, while the Relative Strength Index (RSI) indicator aims north after a brief period of consolidation.
Technical readings in the 4-hour chart also favor the upside, as the bright metal remains well above all its moving averages, with the 20 SMA heading firmly north above the longer ones. Technical indicators turned lower but remain near their recent highs within overbought readings, reflecting the latest leg south rather than anticipating a steeper decline.
Support levels: 1,915.60 1,904.70 1,895.00
Resistance levels: 1,932.60, 1,947.40 1,961.85
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