Gold Price Analysis: XAU/USD bounces off 50-day SMA, momentum turns positive ahead of the Fed


  • Gold prices ease from $1,950.90 after a two-day winning streak.
  • Risk-tone remains positive with Wall Street cheering tech recovery during the pre-ECB optimism.
  • Easing virus-led lockdown in Tokyo, news concerning Tiktok and no more negatives from Chinese data add strength to positive mood.
  • A light calendar will entertain traders ahead of the ECB.

Update: Gold is gearing up toward the all-important decision by the Federal Reserve. Will details on allowing inflation to overheat send XAU/USD higher? The technical situation looks improved after the precious metal bounced off the 50-day Simple Moving Average and momentum on the daily chart turned positive. See:Preview: How the Fed could drown markets while trying not to rock the boat

Gold prices struggle to keep the previous run-up while declining to $1,945.80 during the early Thursday morning in Asia. The yellow metal rose to the highest since September 03 on Wednesday before taking a U-turn from $1,950.90. While market sentiment remains mostly positive, a lack of catalysts and the pre-ECB cautiousness could be considered as reasons for the bullion’s recent pullback.

Risk-on pause, not tamed…

Although traders await more clues to extend Wednesday’s market reversal, S&P 500 Futures print 0.30% gains to 3,404 by the press time. The risk barometer recovered from a one-month low on yesterday as talks surrounding the European Central Bank (ECB) policymakers’ optimism and TikTok parent’s plea to not push for the entire sale to the US gained momentum. Also adding to the market’s optimism could be welcome prints of the US JOLTS Job Openings and an absence of disappointment from China’s inflation numbers.

Furthermore, the recent news that Tokyo is up for notching one level off its highest alert conditions, due to the coronavirus (COVID-19), adds to the market’s optimism.

Other than the risk-positive environment, the US dollar’s declines for the first time in the last seven days also contributed to the bullion’s positive performance.

It should, however, be noted that the Sino-American tension is still on in the background while uncertainty surrounding the Brexit deal and the US aid package continues to hurt the risk sentiment. As a result, buyers await a strong positive message from the ECB, which is less likely, to keep the recent rise.

Technical analysis

Other than the anticipated challenges to the risk, the 21-day SMA level of $1,948 also questions the precious metal’s immediate upside attempts. Hence, the odds of again witnessing $1,900 on the chart can’t be ruled out.

Additional important levels

Overview
Today last price 1945.44
Today Daily Change 13.66
Today Daily Change % 0.71%
Today daily open 1931.78
 
Trends
Daily SMA20 1946.48
Daily SMA50 1909.41
Daily SMA100 1817.48
Daily SMA200 1695.53
 
Levels
Previous Daily High 1940.9
Previous Daily Low 1906.62
Previous Weekly High 1992.42
Previous Weekly Low 1916.42
Previous Monthly High 2075.32
Previous Monthly Low 1863.24
Daily Fibonacci 38.2% 1927.81
Daily Fibonacci 61.8% 1919.71
Daily Pivot Point S1 1911.97
Daily Pivot Point S2 1892.15
Daily Pivot Point S3 1877.69
Daily Pivot Point R1 1946.25
Daily Pivot Point R2 1960.71
Daily Pivot Point R3 1980.53

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures