Gold Price Forecast: XAU/USD turns bearish and could test $2,600

Valeria Bednarik FXStreet

XAU/USD Current price: $2,633.56

Hopes for a cease-fire between Israel and Hezbollah boosted the mood.
Demand for safe-haven assets backs the US Dollar vs the bright metal.
XAU/USD gains bearish traction, aims to test the $2,600 price zone.

Spot GOLD trades around $2,630, having shed roughly $30 after Wall Street’s opening. The bright metal has been under selling pressure since early in Asia, maintaining a sour tone as the day comes to an end. XAU/USD fell despite the broad US Dollar’s weakness, as a better market mood pushed investors away from safe-haven assets.

Investors welcomed headlines indicating a cease-fire agreement between Israel and Hezbollah is very close, according to the Israeli ambassador to the United States (US). Authorities are expected to announce on Tuesday a 60-day cease-fire, with hopes that it could be resolved in such a pause.

Demand for the Greenback increased in the last Monday’s session, helped by the solid performance of US indexes and encouraging US data. The country reported that the Chicago Fed National Activity Index was down a modest 0.4 in October, following an upwardly revised -0.27 in September. At the same time, the November Dallas Fed Manufacturing Business Index posted -2.7, slightly better than the previous -3.

The focus this week will be on the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's (Fed) favourite inflation gauge, which will be published on Wednesday. The country will release alongside the second estimate of the Q3 Gross Domestic Product (GDP).

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows the risk skews to the downside. The pair accelerated south after breaking below a now bearish 20 Simple Moving Average (SMA), while technical indicators turned sharply lower within negative levels after failing to overcome their midlines. The 100 and 200 SMAs maintain their upward slopes, with the shorter one currently at around $2,563, a critical support level in the upcoming sessions.

In the near term, and according to the 4-hour chart, XAU/USD is also at risk of extending its slide. The pair fell below all its moving averages, with the 100 SMA gaining downward momentum at around $2,655. Finally, technical indicators head firmly south within negative levels without showing signs of bearish exhaustion.

Support levels: 2,626.10 2,611.35 2,598.70

Resistance levels: 2,640.40 2,655.00 2,671.55

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 holds above 0.6950 as bullish USD caps gains

AUD/USD edges lower during the Asian session on Tuesday, stalling a two-day recovery move from a two-month low, touched last week. An extended rout in the fixed income market keeps US bond yields elevated near multi-year highs. This, along with geopolitical uncertainties, helps the US Dollar retain its bullish tone despite receding October Fed hike bets. However, expectations for another RBA rate hike this month could act as a tailwind for the Aussie.

USD/JPY rises back above 158.00 despite hawkish BoJ outlook

USD/JPY rises back above 158.00 in the early European morning on Tuesday. The pair strengthens as the Japanese Yen fails to find any inspiration from hawkish BoJ expectations and looming intervention risks. Meanwhile, geopolitical uncertainty and elevated US bond yields keep the US Dollar near its YTD high despite receding October Fed hike bets. This, in turn, helps the pair stay supported.

Gold hits two-month low as bears await break below $4,100 amid sustained USD strength

Gold attracts fresh sellers following the previous day's consolidative price move, and drops to a two-month low during the Asian session, with bears now awaiting a break below the $4,100 mark before positioning for further losses. Despite receding October Fed rate hike bets, the US Dollar retains its bullish tone and continues to undermine demand for the commodity.

Zcash: NU7 upgrade sets the stage for ZEC to resume its rally

Zcash (ZEC) hovers around $1,348 at press time on Tuesday, sustaining its mild gains from Sunday. The network upgrade NU7 went live on Monday, boosting transaction speed and redirecting 60% of transaction fees into future rewards. The institutional outflow eased to roughly $3.50 million on Monday, down from $93.56 million last week, suggesting reduced pressure from redemptions.

The scarcity trade is gaining momentum – The biggest commodity moves may still be ahead

Something extraordinary is happening across global Commodity markets. Oil is above $100. Diesel has reached record prices. Copper has broken records. Global food prices are rising again. China is restricting fuel exports. Governments are releasing emergency reserves.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.