Gold Price Forecast: XAU/USD battles $4,200 as buyers refuse to give up yet

Gold consolidates near three-week highs early Thursday as sellers lurk above the $4,200 level.
US Dollar attempts a bounce as the US government is set to reopen, paving the way for data publication.
The daily technical setup indicates ‘buy-the-dips’ trades in Gold whilst above the 21-day SMA.

Dhwani Mehta FXStreet

Gold is trading close to three-week highs early Thursday, challenging offers near the $4,200 level.

Gold awaits clarity on US data publication

Despite the retreat, Gold remains the most sought after investment asset so far this week.

Concerns prevail over the health of the United States (US) economy in the face of uncertainty over data publication, even as the government is set to reopen after the House of Representatives voted 222-209 to end the record shutdown.

This comes after White House Press Secretary Karoline Leavitt said Wednesday, the federal jobs and inflation reports for October may never get calculated and released due to the shutdown.

Meanwhile, several economists believe that the missed September data will be published as early as next week, while urging the US Labor Department to prioritize November employment, CPI data post-shutdown, per Reuters.

The lack of clarity on the resumption of the statistics prompts markets to trade cautiously, lending some support to safe-haven US Dollar (USD), in turn, capping the Gold price upside.

However, any pullback in Gold will likely be short-lived as markets continue to predict an 25 basis points (bps) interest rate cut by the US Federal Reserve (Fed) next month, according to 80% of economists polled by Reuters.

Looking ahead, Gold traders will continue to closely scrutinize speeches from Fed officials as the central bank appears divided on the next rate move amid weakening labor market conditions and the inflation dilemma.

Gold price technical analysis

As observed on the daily chart, the 14-day Relative Strength Index (RSI) is hold firm near 64, as of writing.

The leading indicator, thus, suggests that upside risks remain intact for Gold.

Buyers need a daily candlestick closing above the $4,200 mark to accelerate further toward the $4,250 psychological level.

Acceptance above the latter will open the door for a retest of the record high at $4,382.

Alternatively, any pullback will likely find support at the previous resistance of $4,129, the 23.6% Fibonacci Retracement level of the parabolic rise to the record high that began on August 19.

The next downside target is seen at the 21-day Simple Moving Average (SMA) of $4,087, below which the $4,050 psychological level will be challenged.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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