XAU/USD outlook: Gold extends gains on Trump's latest comments, nears record high

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold price accelerated higher on Friday, offsetting initial negative signal that was developing on daily chart, from Thursday’s Hanging man candlestick.

Fresh gains (up 1% until early US session on Thursday) came ticks ahead of gold’s record high ($2790, posted on Oct 31) and signaling that bulls remain firmly in play.

The yellow metal is on track for a fourth consecutive weekly gain and about 6% advance in January, with recent rally being sparked by uncertainty surrounding President Trump’s trade policies, particularly the latest signals about softer approach to China tariffs and possible trade deal, as well as his calls to lower interest rates.

Contradicting signals in first few days of Trump’s new term in the White House weakened dollar and boosted demand for safe haven gold.

Retest of new all-time high and attack at nearby $2800 psychological barrier could be likely scenario in coming sessions, with sustained break higher to signal continuation of larger uptrend, which was on hold during past nearly three months for consolidation.

Fundamentals are likely to remain favorable as reality somewhat diverges from Trump’s post-election rhetoric, particularly in foreign policies, while technical studies remain in firm bullish configuration on daily and weekly chart and underpin the action.

Recent break above bull channel resistance trendline signaled that bulls tighten grip.

However, bulls may face increased headwinds from very significant $2790/$2800 resistance zone and enter consolidative phase before resuming higher.

Dips are likely to be shallow (if current environment remains unchanged) and offer better levels to re-enter bullish market.

Former breakpoints at $2730/21 zone now act as solid supports which should keep the downside protected.

Res: 2784; 2790; 2800; 2850.
Sup: 2761; 2748; 2730; 2721.

Interested in XAU/USD technicals? Check out the key levels

1. R3 2786.2
2. R2 2772.57
3. R1 2763.21
PP 2749.58
1. S1 2740.22
2. S2 2726.59
3. S3 2717.23

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

Japanese Yen stays resilient after BoJ maintains status quo

The Japanese Yen stays resilient against its major rivals on Friday, with USD/JPY trading in negative territory below 157.50. The Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting, as expected. In the post-meeting press conference, BoJ Governor Ueda reiterated that they will continue to raise the policy rate and adjust the degree of monetary easing in reponse to economic activity and prices.

Gold bears retain control below $4,000 as hawkish Fed bets back further losses

Gold extends its intraday breakdown momentum below the $4,000 psychological mark through the early European session on Friday, eyeing the monthly swing low amid hawkish US Federal Reserve expectations. US macro data on Thursday pointed to resilient economic growth and persistent price pressures, solidifying bets of an imminent Fed rate hike in December. This is seen as undermining the non-yielding bullion for the second straight day and backing the case for further depreciation.

The hawkish Fed can't lift the US Dollar anymore

About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.

Binance hack shakes crypto, but XRP pullback may not be so bearish

Crypto markets were hit by a big headline overnight. Binance confirmed a security incident in which a compromised engineer's laptop led to unauthorized withdrawals, with an estimated impact of around $6.3 billion. About $3 billion has been frozen so far, Binance says it will cover the losses, and withdrawals were paused while security checks are completed.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.