Gold Price Forecast: XAU/USD holds on to modest gains around $2,660

XAU/USD Current price: $2,659.07

• The poor performance of global stocks underpins demand for the bright metal.
• Federal Reserve officials maintain a mostly neutral tone before the November meeting.
• XAU/USD has room to extend gains, with bulls looking for fresh record highs.

Gold price is marginally higher on Tuesday, pressuring the weekly high and trading not far from the record posted in September at $2,685.45 a troy ounce. The bright metal benefits from a risk-averse mood and easing US Dollar’s demand, albeit the latter is far from turning bearish.

As the United States (US) macroeconomic calendar remained scarce, speculative interest took clues from equities. Wall Street hit record highs on Monday, but the positive momentum faded in Asia, as falling oil prices undermined the energy sector, while tech shares were also on the back foot. Chinese stocks were also pressured amid disappointing local data and concerns about the economic health of the Asian giant.

As a result, European indexes closed in the red, while US ones are also down. Meanwhile, Crude Oil prices eased after Israeli Prime Minister Benjamin Netanyahu told the US that Israel would strike the Iranian military, not nuclear or oil targets, reducing the market’s concerns about the oil supply.

Multiple Federal Reserve (Fed) officials were on the wires but have provided no fresh clues about where the monetary policy is heading next. For the most, their speeches have been neutral, meaning neither dovish nor hawkish enough to hint at a change in the current view that the central bank will deliver 25 basis points (bps) interest rate cuts in the upcoming meetings.

XAU/USD short-term technical outlook  

The daily chart for XAU/USD shows buyers defended the downside at around a bullish 20 Simple Moving Average (SMA), currently at around $2,638. The 100 and 200 SMAs also head north far below the shorter one, in line with the bulls’ dominance. Finally, the Momentum indicator is hovering around its 100 line, while the Relative Strength Index (RSI) indicator turned modestly higher at around  62, also supportive of the bullish case.

The near-term picture shows a limited upward momentum, but the risk remains skewed to the upside. XAU/USD develops above a flat 100 SMA, while the 20 SMA is currently crossing above it, reflecting increased buying interest. Technical indicators, however, have lost their upward strength, holding anyways well above their midlines. Overall, chances are of fresh record highs, particularly if the $2,638.00 level holds.

Support levels: 2,654.90 2,638.00 2,625.40

Resistance levels: 2,673.10 2,685.45 2,700.00