Gold Price Forecast: XAU/EUR holds in consolidation, but focus is on a correction higher

XAU/EUR recovers some of its weekly losses, barely up 0.01.%.
Falling German 10-year bunds and German Real Yields keep the EUR pressured to the downside.
XAU/EUR: Tilted to the upside, as long as it remains above €1,575.

Christian Borjon Valencia FXStreet

Update:

The price remains in consolidation into the open of Asia although from a technical point of view, the bulls have their eyes on a meaningful retracement towards EUR1,610 which is a 38.2% Fibonacci level. The downtrend has been limited by the US dollar's strength, but when looking to the EUR/USD, it could be argued as being overstretched. The US reached a fresh cycle high and the Federal Reserve is priced for a faster pace of tapering whereas the European Central Bank remains dovish. December will be a crucial month in this regard and should there be a hint of convergence between the ECB and the Fed, then gold could break higher.

End of update

Gold (XAU/EUR) vs. the euro trims some of its weekly losses, advances 0.01%, trading at €1,596 during the day at the time of writing. Thin liquidity conditions with the US on Thanksgiving holiday, and an upbeat market, put a lid on the yellow-metal free fall. European stock indices are in the green, while US equity futures point to the upside.

Meanwhile, the German 10-year bund, which significantly influences the EUR, falls almost three basis points, sitting at -0.248%. Also, German Real Yields drop seven basis points, down to -1.93%, weighing on the EUR fall against the non-yielding metal.

Choppy trading conditions in the XAU/EUR keep gold trading in a narrow range of €1,594-€1,600; amid thin liquidity conditions, US Stock and Money Markets remain closed, in the observance of Thanksgiving.

On Thursday, the Eurozone economic docket featured the German GFK Consumer Confidence Survey for December showed a further contraction than expected. The number came at –1.6, lower than the -0.5 expected. Further, the Gross Domestic Product for Germany for the Q3 came at 1.7%, a tenth lower than the 1.8% expected, which caused no meaningful impact on XAU/EUR.

XAU/EUR Price Forecast: Technical outlook

The daily chart depicts that gold corrected beneath the top-trendline of the Pitchfork’s channel, from YTD tops around €1,650, down to around €1,580, near the middle-trendline of Pitchfork’s channel, which acted as support. Since then, gold has stabilized around the €1,575-€1,600 range, though XAU/EUR still tilted to the upside, per the daily moving averages (DMA’s) residing below the spot price with an upward slope.

On the upside, the first resistance would be €1,600. A breach of the latter would expose Pitchfork’s top-trendline to around €1,640. Otherwise, the first support would be Pitchfork’s middle-trendline around €1,575, followed by the confluence of the 50-DMA and the July 16 swing high at €1,550.

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

GBP/USD flirts with two-day lows near 1.3180

GBP/USD remains on the back foot in the latter part of Tuesday’s session, sliding to the sub-1.3200 area and challenging weekly lows. Cable’s decline comes as investors assess the political uncertainty in the UK, coupled with softer-than-expected UK PMI data and the better tone in the Greenback.

EUR/USD weakens below 1.1400 on stronger Dollar

EUR/USD adds to Monday’s losses and recedes below the 1.1400 support to clinch fresh 13-month lows in the latter part of Tuesday’s NA session. The pair’s marked sell-off comes on the back of the persistent move higher in th US Dollar, always propped up by rising bets of further tightening by the Fed.

Gold appears supported near $4,100 for now

Gold rapidly reverses Monday's bounce and is trading sharply lower on Tuesday. The yellow metal, however, manages well to keep business above the $4,100 mark per troy ounce despite a firmer US Dollar and expectations that the Fed will keep rates higher for longer.

Bittensor and Near Protocol Outlook: AI-linked tokens face deeper sell-off

The cryptocurrency market trades amid increasing sell-side pressure on Tuesday, reflecting a broader deterioration in sentiment and appetite for risk assets. Artificial Intelligence (AI)-linked tokens such as Bittensor (TAO) and Near Protocol (NEAR) exhibit both fundamental and technical weaknesses, trading at $217 and $1.99, respectively.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.