Gold Price Forecast: XAU/USD closer to $2,000 after breaking $1,975

Matías Salord FXStreet

XAU/USD Current price: $1,984.55

Lower US Treasury yields boost the yellow metal following weaker-than-expected US data.
XAU/USD breaks above $1,975 and the 20-day SMA.
Gold has erased last week's losses and is now looking at $2,000.

Spot Gold rose significantly on Thursday, resuming the upside. XAU/USD broke above the $1,975 resistance area and jumped to the highest level in more than a week, boosted by a weaker US Dollar and falling Treasury yields. The price rose more than $20, also driven by technical factors.

The US weekly Jobless Claims report showed Initial Claims at the highest level in nearly three months, reaching 231,000, which is above the market expectation of 220,000. Continuing Claims reached 1.865 million, the highest in almost two years. Another report indicated a larger-than-expected contraction in Industrial Production during October. These figures weighed only modestly on the US Dollar but pushed US yields further down and triggered a jump in Gold.

As the data continues to solidify the position that the Federal Reserve (Fed) is done raising interest rates, Gold continues to shine, while the US Dollar remains under pressure. The question for the future is how high the weekly close will be for XAU/USD. The US data due on Friday is unlikely to be a game-changer. The focus remains on a volatile bond market and risk sentiment.

XAU/USD short-term technical outlook

Gold broke above the 20-day Simple Moving Average (SMA) at $1,974 and the $1,975 resistance area, rising to $1,987, the highest level since November 6. As long as the price remains above $1,974, the focus will be on the next strong resistance area seen at $1,992. A break above this area would likely see the yellow metal rise above $2,000.
The 4-hour chart shows positive signs ahead of the Asian session, suggesting that the upward trend might continue. Immediate support stands now at $1,975, followed by the 100-SMA and then a key uptrend line at $1,964. A slide below the latter would indicate the end of the current rally, suggesting a potential initial decline to $1,950.

Support levels: $1,974 $1,962 $1,954

Resistance levels: $1,992 $2,001 $2,010

View Live Chart for XAU/USD

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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