Gold Price Forecast: XAU/USD on track to test $2,000

Valeria Bednarik FXStreet

XAU/USD Current price: $1,984.26

European Central Bank held rates steady after ten consecutive hikes.
The United States Gross Domestic Product rose by more than anticipated in Q3.
XAU/USD bullish potential intact after first-tier events, $2,000 in sight.

Spot Gold peaked early Thursday at $1,993.44 a troy ounce, edging lower ahead of Wall Street’s opening and following some relevant news. On the one hand, the European Central Bank (ECB) announced its decision on monetary policy, and as widely anticipated, policymakers held fire after ten consecutive hikes. President Christine Lagarde and co made a point on rates, declaring the decision was unanimous, adding that discussing rate cuts is out of the table for now, and finally noting that they can not confirm rates would not be any higher. Still, the poor economic performance of the Euro Zone was the real reason for the on-hold decision, despite policymakers not saying so.

The US Dollar ticked higher with the news, gaining additional ground after the release of the United States (US) preliminary estimate of the Q3 Gross Domestic Product (GDP). The report showed the economy grew at an annualized pace of 4.9% in the three months to September, above the 4.2% expected and much better than the previous 2.1%. The US economy confirmed its resilience. Still, market players pondered Federal Reserve (Fed) Chairman Powell’s words, saying the central bank needs below-trend growth to assist policymakers with their battle against inflation.

Trading was choppy after the events, but after the dust settled, risk turned off. Stock markets are on the back foot, while XAU/USD recovers amid renewed demand for safety.

XAU/USD short-term technical outlook

XAU/USD is up for a second consecutive day, still overbought in the daily chart. The bright metal keeps developing above all its moving averages, with the 20 SMA extending its advance below directionless longer ones. Technical indicators, in the meantime, consolidate within overbought readings without any other sign of upward exhaustion. The monthly peak at $1,997.17 provides immediate resistance.

For the near term, and according to the 4-hour chart, the risk skews to the upside. XAU/USD is meeting near-term buying interest around a flat 20 SMA, while the longer ones maintain their bullish slopes far below the shorter one. Finally, technical indicators have bounced from around their midlines, in line with another leg north.

Support levels: 1,977.65 1,964.30 1,953.30

Resistance levels: 1,997.20 2,008.10 2,011.95

View Live Chart for XAU/USD

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 rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.