Gold Price Forecast: XAU/USD extends record run beyond $3,730

Valeria Bednarik FXStreet

XAU/USD Current price: $3,736.92

Financial markets keep digesting the latest Fed decision and dropping the US Dollar as a result.
American data spread throughout the week should confirm or deny speculative interest perspectives.
XAU/USD is again overbought, but there are no technical signs of upward exhaustion.

Spot Gold keeps rallying to record levels, reaching $3,73 a troy ounce on Monday and holding nearby in the American session. Despite a generalized optimism, demand for the bright metal continues amid broad US Dollar (USD) weakness.

Financial markets are still digesting the latest United States (US) Federal Reserve (Fed) monetary policy announcement. The US central bank lowered the benchmark rate as expected in the September meeting, and hinted at additional cuts in November and December. American data scheduled for this week will help speculative interest confirm or deny their beliefs on the matter.

S&P Global will publish the preliminary estimates of the September Purchasing Managers’ Indexes (PMIs) on Tuesday, anticipated to show business activity expanded at a healthy pace. The final Q2 Gross Domestic Product (GDP) estimate will be out on Thursday, while on Friday, the country will release updated Personal Consumption Expenditures (PCE) Price Index figures, the Fed’s favorite inflation gauge.

XAU/USD short-term technical outlook

The XAU/USD pair is firmly up for a second consecutive day, and technical readings in the daily chart suggest further advances are still in the docket. The Relative Strength Index (RSI) indicator bounced from its 70 line, and maintains a strong upward slope within overbought readings. At the same time, the Momentum indicator consolidates well above its 100 line, lacking directional strength. Finally, the pair runs beyond bullish moving averages, with the closest being the 20 Simple Moving Average (SMA) at around $3,581.

The 4-hour chart for XAU/USD shows technical indicators are partially losing their bullish slopes after reaching overbought readings, still holding within extremes and without signs of changing course. At the same time, the bright metal runs beyond all its moving averages, with a mildly bullish 20 Simple Moving Average (SMA) hovers around $3,674.00, while the 100 and 200 SMAs accelerated north well below the shorter one.

Support levels: 3,724.10 3,707.80 3,691.50

Resistance levels: 3,750.00 3,765.00 3,780.00

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold pares intraday losses; down a little below $4,100 as focus remains on US NFP

Gold recovers most of its early intraday losses, trading with a mild negative bias near $4,070-$4,075. The US Dollar extends Thursday's recovery from its lowest level since late September, exerting some downward pressure on the commodity. Furthermore, a hawkish US Federal Reserve contributes to the precious metal pullback from a two-week high, which it touched the previous day. Bearish traders, however, seem hesitant ahead of the release of US monthly employment details, which should provide a fresh impetus to the precious metal.

Canada Unemployment Rate set to hold at 6.5% as hiring recovers

Statistics Canada will release its October Labour Force Survey on Friday at 13:30 GMT, with markets anticipating a modest recovery in employment following September's sharp decline. The Unemployment Rate will also be closely watched, as the latest figures could influence the Canadian Dollar.

US Nonfarm Payrolls expected to pick up in October

The United States Bureau of Labor Statistics is set to release October Nonfarm Payrolls data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.