Gold Price Analysis: XAU/USD supported above key $1830 area but 200 and 50 DMAs blocking further gains

Spot gold prices look likely to squeeze between a short-term uptrend support and resistance in the $1850s.
A break above the 200 and 50DMAs in the $1850s could open the door to a move towards late-January highs at $1875.

Joel Frank Independent Analyst

Spot gold prices were choppy on Wednesday, swinging between a roughly $20 range between the $1835 and $1855 levels, but still managed to close Wednesday’s session with gains of around 0.3%.

Looking at the spot price over a short time horizon, XAU/USD has respected an uptrend from the Monday Asia Pacific session open low at just under $1830. Meanwhile, XAU/USD’s 200-day moving average (DMA) at $1854 provided tough resistance on Wednesday, implying that so long as the precious metal continues to respect this week’s uptrend support and 200DMA resistance, prices should continue to squeeze in the hours/days ahead, forming an ascending triangle that would theoretically be subject to a break out to the upside.

Breaking above Wednesday’s high/the 200DMA will be tough as, as spot prices will also need to surpass the 50DMA at $1857. But should the bulls succeed, XAU/USD would then be in with a shot of rallying back towards its late-January highs of around $1875.

Conversely, failure to break above this tough area of resistance in the $1850s and a subsequent break below the uptrend that has offered support to the price action thus far this week would open the door to a test of support in the $1830-$1835 area (the 20 and 27 January and 2 February lows). A break below this level could open the door to a collapse back down towards this month’s low in the $1780s, ahead of lows set last November in the $1760s.

XAU/USD four hour chart

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.