Gold, the Chart of the Week: XAU/USD bulls lurking with eyes on trendline resistance

Gold is running into a support zone that leaves upside corrections in focus for the initial balance of the week.
The US Dollar is up high which also leaves a corrective bias for Gold price.

Ross J Burland FXStreet

Gold price ended lower for a fifth-straight day on Friday as the market adjusted for higher for longer from the Federal Reserve due to evidence that the economy is running hot. Gold price fell from trendline resistance mid-week and extended the losses to a fresh cycle low of $1,809 while US Bond yields also climbed.

The US 10-year note yield reached a high of 3.978% and ended the day paying 3.947%, up from the day's low of 3.854%. The US Dollar index reached a high of 105.32 and ended the day up high after Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation measure, rose by an annualized 5.4% in January, up from 5.3% in December and ahead of a 4.9% consensus estimate.

All in all, this leaves the outlook data dependent and markets will need to wait for the Nonfarm Payrolls report a little longer than this week as it falls on the 2nd Friday of this month. Instead, ISM surveys will be on the watchlist for this week and data already released point to a rebound for the ISM mfg index in Feb following five months of consecutive declines that saw the series drop to a post-Covid low of 47.4 in Jan, analysts at TD Securities said. ''Separately, we look for the ISM services index to stabilize around its current level after the notable Dec-Jan zigzag in the series. We might revise our projection as more data is released next week.''

Gold and DXY technical analysis

The US Dollar is up high and a correction would be anticipated for the initial balance to start the week.

This puts the focus on the upside for the Gold price to revisit prior support and test the trendline resistance as illustrated o the above 4-hour charts.

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.