XAU/USD Current price: $1,994.35
- A dovish US Federal Reserve maintains the US Dollar on the weak side.
- A mildly hawkish Bank of England further weighed on the American currency.
- XAU/USD bullish strength persists, speculative interest aims for $2,000 and beyond.
Spot gold retains its positive momentum and trades around $1,995 a troy ounce on Thursday. XAU/USD is extending its post-Fed advance, as the American central bank came out with a dovish message on Wednesday, triggering a dollar’s sell-off. Federal Reserve Chair Jerome Powell acknowledged that the banking crisis pushed US policymakers into a softer monetary policy stance.
The Greenback remained under pressure on Thursday after the Bank of England (BoE) surprised investors with a mildly hawkish decision. The central bank hiked its benchmark rate by 25 basis points (bps) as expected while noting that further rate increases are still on the table, particularly if there’s evidence of persistent inflationary pressures. Market players were anticipating the BoE would hint at a pause on monetary tightening, with the news backing the Pound to the detriment of its American rival.
Meanwhile, Wall Street started the day on a strong footing, with the three major indexes up over 1% each. Government bond yields, on the other hand, continue to retreat from the peaks posted earlier in the week. The 10-year Treasury note currently yields 3.43%, down 6 basis points, while the 2-year note offers 3.85%, down 12 bps.
XAU/USD price short-term technical outlook
The daily chart for the XAU/USD pair hints at further gains ahead. Technical indicators recovered ground after correcting overbought conditions, with the Relative Strength Index (RSI) indicator aiming higher at around 69 and the Momentum indicator consolidating near its recent multi-week highs. At the same time, the 20 Simple Moving Average (SMA) accelerated higher, well above the longer ones and below the current level, maintaining its upward strength.
In the 4-hour chart, technical indicators head north within positive levels and at fresh weekly highs, reflecting persistent buying interest. At the same time, Gold develops above its moving averages, although the 20 Simple Moving Average (SMA) stands directionless around a Fibonacci support, the 23.6% retracement of the latest bullish run at $1,962.30. The longer moving averages offer bullish slopes far below the shorter one, also in line with the dominant trend.
Support levels: 1,978.75 1,962.30 1,954.00
Resistance levels: 2,009.80 2,021.90 2,034.10
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