Gold Price Forecast: Blue skies ahead above $1,834
|- Gold rebounds after reaching a daily low at $1808.
- Weaker US dollar keeps XAU/USD well supported.
Update: The price of gold is ending on Wall Street on a strong footing following another bad day for the US dollar.
XAU/USD was trading around $1,814 at the closing bell having travelled between a low of $1,808.73 and $1,820.07 the high.
While that range is narrow, the price is in fact moving steadily higher, underpinned by a weaker tone surrounding prospects of an imminent taper of the Federal Reserves quantitive easing programme.
There are expectations for a disappointing jobs number this week while pushes back the case for a taper no sooner than December.
In this regard, investors are buying risk which is leaving the greenback out to dry.
The US dollar, as measured against a basket of currencies in the DXY index ended around 0.13% lower and near to 92.500. The index had fallen to as low as 92.378 on the day, just points above the structural support of 92.344.
Should this level break, it could be blue skies ahead for the gold bugs above $1,834.
End of update
Gold prices moved sideways on Wednesday, supported above $1800. After the ADP report, XAU/USD peaked at $1820 and then pulled back, falling to $1808. The yellow metal is now around $1815, looking at the $1820 area.
The current positive tone is being supported by a weaker US dollar across the board. The DXY trades under 92.40, at the lowest level since August 6, down 0.27% for the day. US yields are modestly lower while stocks in Wall Street are posting modest gains.
US economic data came in mixed on Wednesday ahead of Friday’s NFP. The ADP employment report showed an increase of 374K in private jobs during August below the 613K of market consensus. The ISM manufacturing index rose unexpectedly to 59.9 in August; with the employment index at 49, down from 52.9. The dollar was affected by the job’s number and then recovered, only for a brief momentum, following the ISM report.
Levels to watch
On the upside, the immediate resistance is seen at $1820; above attention would turn to the July and August tops around $1833. A consolidation above $1835 could clear the way toward $1850. A slide back under $1800 would alleviate the upside pressure; the next support stands at $1790 followed by $1782.
Technical levels
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