Gold Price Forecast: XAU/USD needs to break $2,010 to avoid sharp correction
XAU/USD Current price: $2,000
- Gold surged on Tuesday, approaching its October highs.
- The US Dollar rose modestly but remains vulnerable.
- XAU/USD approached $2,010; to remain bullish as long as it hold above $1,980.
Spot Gold surged on Tuesday, rising from below $1,980 to near a key resistance area at $2,010. This upward movement occurred even as stock prices declined and the US Dollar stabilized.
The rally in Gold on Tuesday took place as US yields remained steady. After reaching $2,007, XAU/USD pulled back towards $2,000. The overall trend remains biased to the upside, supported by expectations that the Federal Reserve (Fed) is done raising interest rates that weigh on the Greenback.
Market participants await the FOMC minutes. On Wednesday, important data from the US is due, including Jobless Claims and Durable Goods Orders. A negative reading in these numbers could further boost XAU/USD above $2,000. However, at the moment, it does not appear ready to warrant a more aggressive rally unless Treasury yields decisively break to the downside, indicating that they have peaked.
XAU/USD short-term technical outlook
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The daily chart of XAU/USD shows a bias towards the upside, supported by technical indicators such as Momentum crossing the midline and the Relative Strength Index (RSI) moving north, still comfortably away from overbought levels. However, an important resistance level emerges around $2,010, an area that constrained the upside in October. A consolidation above that level is necessary to open the doors for further gains.
On the 4-hour chart, the bias also leans towards the upside. The immediate support now stands at $1,994, followed by the 20-Simple Moving Average (SMA) at $1,984. An uptrend line at $1,978 appears to be the last line of defense for a more significant bearish correction.
Support levels: $1,994 $1,985 $1,978
Resistance levels: $2,010 $2,023 $2,029
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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.
