- Gold struggles to extend post-Fed gains amid cautious optimism.
- Fed matched market forecasts of faster tapering and firmer dot-plot, ECB is up for conveying PEPP deadline.
- Eurozone economic forecasts will be the key, PMIs, risk catalysts may entertain traders.
Gold (XAU/EUR) grinds higher around €1,580, up 0.24% intraday heading into the key Thursday’s European session.
The yellow metal prices in Euro refreshed a two-week low the previous day before bouncing off and portraying a daily positive closing amid the overall recovery in market sentiment post-Fed.
That said, the market’s surprise reaction to the US Federal Reserve’s hawkish halt could be linked to Fed Chair Jerome Powell’s comments like “the Omicron variant poses risks to the outlook”, as well as refrain from rate hikes until the tapering is completed.
Following that, Omicron woes join the escalating tussles between Beijing and Washington to test the market sentiment during the lackluster Asian session. The US push for the Uyghur Bill and Beijing’s rush to control data companies are the latest factors portraying the cold war.
Amid these plays, US Treasury yields struggle to extend the previous two-day advances while the stock futures in the West print mild gains by the press time.
Moving on, preliminary readings of the December month PMIs could entertain the XAU/EUR traders but major attention will be given to how the ECB policymakers confront the hawkish calls amid Omicron fears.
Read: European Central Bank Preview: More recalibration or actual tightening?
Technical analysis
An upward sloping trend line from late September, around €1,565 defends gold buyers of late.
Given the RSI recovery supporting the XAU/EUR run-up, the gold prices are likely to cross the 100-SMA immediate hurdle surrounding €1,580. However, any further upside will be challenged by the 200-SMA level near €1,590, followed by the €1,600 threshold.
In a case where gold buyers dominate past €1,600, the late November’s swing high near €1,610 and the €1,615 level may entertain the bulls before directing them to the last month’s peak of €1,653.
On the contrary, a clear downside break of the stated trend line support of €1,565 will make the quote vulnerable to drop towards the monthly low of €1,555.
Though, multiple supports around €1,550 will test the XAU/EUR bears past €1,555, a break of which will highlight November’s low of €1,519.
To sum up, XAU/EUR remains firmer ahead of the key ECB meeting.
XAU/EUR: Four-hour chart
Trend: Further upside expected
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.
Recommended content
Editors’ Picks
EUR/USD fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.