XAUUSD Current price: $1,638.11
- Central banks' monetary policy decisions keep investors on the sidelines.
- Tepid Chinese data undermined demand for high-yielding assets and backed the dollar.
- XAUUSD aims to extend its slump towards the year low at $1,614.81 a troy ounce.
Spot gold fell to $1,633.37 a troy ounce at the beginning of the week as a dismal market mood fueled demand for the American currency. The initial catalyst came from China, as local data showed that the economy contracted further in October as the zero-covid policy keeps millions of citizens under strict lockdown.
Investors also turned cautious amid upcoming first-tier events. Several central banks, the US Federal Reserve included, will announce their monetary policy decisions. The Reserve Bank of Australia will open the central banks’ calendar on Tuesday and is expected to announce a modest 25 bps rate hike despite inflation jumping to a two-decade high in the third quarter of the year. The Bank of England will have a Super Thursday, with the latest political turmoil in the United Kingdom generating uncertainty on what Governor Andrew Bailey and co can do this time.
Wall Street trades in the red but off early lows as European indexes managed to shrug off the negative stance and closed with modest gains. Bouncing equities are limiting the dollar demand mid-US session.
XAUUSD price short-term technical outlook
The bright metal trades at its lowest in six days, currently around $1,638. Gold met sellers around a Fibonacci level, the 23.6% retracement of the $1,729.54/$1,617.12 decline at $1,643.60. XAUUSD daily chart shows that the 20 SMA turns south above the current level and below bearish longer ones as technical indicators grind lower within negative levels, skewing the risk to the downside.
In the near term, and according to the 4-hour chart, technical readings favor a downward extension. The pair trades below bearish moving averages, with the 20 SMA accelerating south below the longer ones. Additionally, technical indicators consolidate below their midlines without clear directional strength. The metal has room to extend its slump towards the year’s low at $1,614.81 as long as the aforementioned Fibonacci resistance level keeps attracting sellers.
Support levels: 1,627.65 1,617.10 1,605.00
Resistance levels: 1,643.60 1,654.70 1,665.70
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.