XAU/USD outlook: Bulls hold grip for retest of new record high

XAU/USD

Gold price came just ticks ahead of new record high ($2685) during European trading on Wednesday, in fresh extension of bull-leg from $2602 higher low of Oct 10 and the bottom of corrective phase from $2685.

The metal remains strongly supported by growing prospects for global monetary policy easing, geopolitical tensions and uncertainty surrounding nearing US election.

Although the Fed officials are divided on the number of rate cuts until the end of the year, the central bank remains on track for more policy easing, with markets awaiting coming economic data from the US to get clearer picture about Fed’s rate cut trajectory.

Bulls are likely to retest $2685 peak, but overbought conditions on daily chart and 14-d momentum in neutral mode suggest that price may hold at this zone for consolidation, before resuming higher.

Converged 10/20DMA’s contribute to such scenario, with dips expected to find ground at $2640 zone to mark a healthy correction however, larger bulls should stay intact while pivotal $2600 support holds.

Round-figure $2700 and Fibo projection at $2705 (123.6%) mark immediate targets, ahead of projected levels at $2717 (138.2%), $2736 (161.8%) and $2748 (176.4% of the upleg from $2602).

Res: 2685; 2700; 2705; 2717.
Sup: 2658; 2645; 2633; 2621.

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