Gold Price Analysis: XAU/USD returns below $1,760 after a spike up to $1,780


  • Gold loses momentum after hitting $1,780 high.
  • Monetary normalization and US dollar strength are undermining demand for bullion.
  • XAU/USD nearing important support at $1,725 and $1,675.

Gold futures have returned to previous ranges, below $1,760 on Friday, following a $20 spike, capped at $1,780 following the release of the US Non-Farm Payrolls report. The yellow metal has been moving without a clear direction over the last few days and is set to close the week barely unchanged.

Gold, on the defensive on Fed tapering expectations

Bullion prices jumped about 1% on the back of weaker than expected US employment figures, to hit two-week highs at $1,780. The bullish momentum, however, lacked follow-through, with the pair giving away gains as the market accepted the fact that this will not dissuade the Federal Reserve to start tapering bond purchases, probably a soon as in November.

US Non-Farm Payrolls increased by 194,000 in September, missing expectations of a nearly 500,000 increment. Beyond that, the unemployment rate declined to 4.8%, from 5.2% in August, while the average hourly earnings increased 0.6% on the month, and 4.6% year-on-year.

XAU/USD remains on the defensive, after having lost about 4% over the last four weeks on a combination of factors. The expectations of gradual monetary policy normalization by the world’s major central banks, and, in particular, the prospects that the US Federal Reserve will announce the end of QE over the coming months, are denting the appeal of precious metals.

Furthermore, the rally on US Treasury bond yields, with the US Benchmark above 1.5% for most of the week, has boosted USD strength, thus increasing pressure on the US dollar-denominated precious metal.  

XAU/USD: Above important resistance at $1,725 and $1,675

The pair is now consolidating above $1,745 (October 6 low). Below here, the next support level would be at $1,720 (September 29 and 30) low, which might expose 2021 lows at $1,6080/90.

On the upside, the pair should return above $1.760 (20-day SMA) and $1,780/85 (50-day SMA and September 22 low), which would increase confidence for the bulls and drive the pair towards September 15 high at $1.807.

Technical levels to watch

XAU/USD

Overview
Today last price 1758.58
Today Daily Change 2.68
Today Daily Change % 0.15
Today daily open 1755.9
 
Trends
Daily SMA20 1763.27
Daily SMA50 1780.71
Daily SMA100 1805.24
Daily SMA200 1799.93
 
Levels
Previous Daily High 1766.99
Previous Daily Low 1752.03
Previous Weekly High 1764.32
Previous Weekly Low 1721.71
Previous Monthly High 1834.02
Previous Monthly Low 1721.71
Daily Fibonacci 38.2% 1757.74
Daily Fibonacci 61.8% 1761.28
Daily Pivot Point S1 1749.62
Daily Pivot Point S2 1743.35
Daily Pivot Point S3 1734.66
Daily Pivot Point R1 1764.58
Daily Pivot Point R2 1773.27
Daily Pivot Point R3 1779.54

 

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.

EUR/USD News

GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.

GBP/USD News

Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures