- Gold extends Friday’s recovery moves from monthly low.
- Risk-on mood weighs on US dollar, stimulus, covid headlines entertain optimists.
- China’s Evergrande, German Election, US Durable Goods Orders eyed for fresh impulse.
- Gold Weekly Forecast: XAU/USD remains vulnerable amid hawkish Fed outlook
Update: Gold is easing off the higher levels, as the risk-on market environment amid ebbing China Evergrande fears and US stimulus optimism dulls the safe-haven appeal of the bright metal. Gold bulls also take a breather after the recent rebound from six-week lows, ahead of the Fedspeak and US Durable Goods Orders data.
According to the Technical Confluences Detector, gold is unable to clear out a powerful hurdle at $1760, which is the convergence of the pivot point one-day R1 and the SMA5 one-day. The next hurdle awaits at $1763, the confluence of the SMA100 one-hour and the Bollinger Band four-hour Middle. Further up, a dense cluster of healthy resistance levels stacks up around $1766-$1767, where the Fibonacci 61.8% one-week, SMA200 one-hour and pivot point one-day R2.
On the other side, immediate support is seen at the Fibonacci 23.6% one-day at $1754, below which the $1750 level could be put at risk. At that point, the Fibonacci 23.6% one-week collides with the Fibonacci 38.2% one-day and SMA10 four-hour. The last line of defense for gold bulls will be the critical Fibonacci 61.8% one-day at $1747.
Here is how it looks on the tool
Gold (XAU/USD) floats around $1,760, up 0.50% intraday, during the second consecutive daily upside ahead of Monday’s European session start. In doing so, the metal cheers US dollar weakness amid the risk-on mood. However, the recent consolidation in the market sentiment seems to poke the buyers by the press time.
Market optimism takes clues from US stimulus and welcome covid headlines from Japan, India and Australia. Also, the China-Canada prisoner swap recently eased the Sino-American tension by allowing Huawei founder’s daughter, also the firm’s Chief Financial Officer (CFO) to go home. It’s worth noting that the absence of Evergrande news and a bit of silence over the Fed tapering concerns add to the brighter risk appetite.
Meanwhile, China’s power cuts and energy crisis in the UK weigh on the sentiment. Further, fears that the Eurozone’s powerhouse will be in political limbo, due to the German election, challenge the risk-on mood.
Amid these plays, the US 10-year Treasury yields pull back from a three-month high whereas the S&P 500 Futures rise 0.38% intraday by the press time. Further, the US Dollar Index (DXY) snaps a three-week uptrend with a 0.05% intraday loss, recently easing to 93.20.
Given the major attention over the risk catalysts, today’s US Durable Goods Orders may fall short of entertaining the gold traders. However, optimistic forecasts for August can renew Fed’s tapering concerns and weigh on the gold prices.
Read: US Durable Goods Orders August Preview: Retail Sales have led the way
Technical analysis
Gold keeps rebound from the golden Fibonacci retracement (Fibo.) level of 61.8% amid firmer RSI. However, multiple levels marked since early August joins 50% Fibo. to restrict the metal’s immediate upside to around $1,760.
Even if the gold prices rally beyond $1,760, a downward sloping trend line from September 03 and 38.2% Fibonacci retracement near $1,778 will precede the 200-SMA, near $1,788, to challenge bulls.
Meanwhile, pullback moves need to sustain below the 61.8% Fibo. level surrounding $1,743.
Following that, $1,724 and $1,718 may offer intermediate halts during the gold bears’ rush towards the $1,700 threshold, a break of which will highlight the yearly low of $1,687.
Gold: Four-hour chart
Trend: Pullback 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 steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.