XAUUSD Current price: $1,661.04
- Wall Street shrugged off the negative stance while US government bond yields retreated.
- The dollar’s extreme overbought conditions finally turned into a corrective movement.
- XAUUSD needs to extend its rally beyond $1,688 to sustain the advance.
XAUUSD bounced from a fresh two-year low of $1,614.81 a troy ounce as dip buyers appeared on the dollar’s extreme overbought conditions. The bright metal peaked at $1,661.57, its highest for the week, holding above the $1,650 mid-US afternoon.
The dollar strengthened throughout the first half of the day on the back of comments from US authorities, pointing out US economic strength. Nevertheless, the greenback changed course with Wall Street’s opening, without a particular catalyst. True, government bond yields have retreated sharply, with the 2-year Treasury note currently yielding 4.13% and the 10-year note, 3.76%, down roughly 20 points.
At the same time, Wall Street shrugged off its negative tone, with major indexes trading in the green. The main focus remains on central banks and whatever policymakers may or may not do to tame inflation without smashing economic progress. Generally speaking, the US seems to be in much better shape than its major counterparts, and the market is playing that game today. Still, the future seems gloomy, as the path towards steady growth is long and bumpy.
Gold price short-term technical outlook
The daily chart for the XAUUSD pair shows that technical indicators have finally left the extreme oversold territory, maintaining their upward slopes but well below their midlines, leaving the current advance as a corrective movement. The 20 SMA keeps heading south below the longer ones, providing dynamic resistance at around $1,683. Gold topped at $1,688 in the previous week, the level to beat for the current rally to become more sustainable.
Gold is losing bullish strength in the near term, according to the 4-hour chart. Technical indicators have turned flat but hold within positive levels, while the 20 SMA has lost its bearish momentum and now consolidates at around $1,635. The longer moving averages, in the meantime, maintain their firmly bearish slopes far above the current level.
Support levels: 1,649.75 1,634.60 1,621.05
Resistance levels: 1,661.70 1,678.50 1,688.00
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD eases below 1.1000 ahead of German inflation data
EUR/USD is trading below 1.1000, losing its upside traction in the European session on Wednesday. The pair is holding steady, as the US Dollar finds its feet despite a sell-off in the US Treasury bond yields. Traders stay cautious ahead of the German inflation and US GDP data.
GBP/USD retreats below 1.2700 as US Dollar decline stalls
GBP/USD is falling back below 1.2700, extending its retreat from multi-month highs in European trading on Monday. The pair fails to find any inspiration from BoE Governor Bailey's hawkish comments, as the US Dollar looks to stabilize ahead of top-tier economic data and Fedspeak.
Gold price eases from multi-month peak, dovish Fed expectations favour bulls ahead of US GDP
Gold price (XAU/USD) advanced to a near seven-month peak, around the $2,052 area on Wednesday, albeit trims a part of its intraday gains heading into the European session.
Bitcoin price could touch $41,000 in December, analyst predicts bullish breakout
Bitcoin worth $1 billion has been withdrawn from exchanges in the last two weeks. The SEC asked for public feedback on Franklin Templeton’s Spot Bitcoin ETF, fueling anticipation of approval.
Germany CPI Preview: Inflation set to ease further, not necessarily negative for the Euro Premium
The Federal Statistical Office of Germany (Destatis) will release inflation data on Wednesday at 13:00 GMT. The annual German Consumer Price Index (CPI) is expected to rise 3.5% in November, down from the 3.8% increase reported in October.