Gold Price Forecast: XAU/USD trapped between $1,840-65 amid RSI’s overbought conditions
|- XAU/USD broke above a 4-month downslope resistance trendline, aiming towards $1,900.
- XAU/USD rallied on higher US consumer inflation above 6%, the highest in 30 years.
- XAU/USD: Trading sideways, within the $1,840-65 range.
Gold (XAU/USD) is steady during the New York session, up some 0.50%, trading at $1,861 at the time of writing. During the Asian session, it seems that gold bulls bought the dip, as witnessed by the 1-hour chart, as XAU/USD consolidated around the $1,840-50 area, before resuming the upward move, which stalled around the $1,860s tops-
The market sentiment is mixed after hotter-than-expected US inflation figures unveiled on Wednesday. In fact, the headline US CPI number on a yearly basis spiked above 6% for the first time in three decades. This spurred appetite for precious metals, which have been an inflation hedge over time, with gold and silver rallying in the last couple of days.
Overall, US dollar strength has not been an excuse for the yellow metal to rise. Furthermore, the US 10-year Treasury yield rose above 1.50%, which could usually exert pressure on gold prices; however, real yields are the main driver for gold. As of November 10, real yields sit at -1.85%; therefore, as long as real yields keep falling, gold would maintain an upward bias.
The US economic docket will be light on Thursday in observance of the Veterans Day holiday. On Friday, the University of Michigan Consumer Sentiment Index for November could offer gold traders a fresh impetus to take action. Also, New York Fed’s President John Williams will speak at a virtual event hosted by the New York Federal Reserve.
XAU/USD Price Forecast: Technical outlook
Gold keeps trading above a 4-month downslope resistance trendline, broken on Wednesday, steady around tops $1,860s. The daily moving averages (DMA’s) were left behind the spot price, meandering around the $1,780-95 area, with the 50-DMA aiming higher, while the longer time-frames one directionless.
Further, the Relative Strength Index (RSI) is at 70, inside overbought conditions, confirming that the upward move might ease before resuming to the upside. However, for XAU/USD bulls to accelerate an attack towards $1,900, they will need a daily close above the June 3 low at $1,864.98. In that outcome, the following resistance area would be the psychological $1,900.
On the flip side, the September 3 high at $1,834 would be the first support area, that once breached, would open the door for a further downfall towards $1,800.
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.