Gold Price Forecast: XAU/USD attempts to score above $1,800 amid softer USD


Update: Gold prices are set to close the week on a higher note, as they remain steady near $,1800 so far this Friday. The precious metal touched the highs of $1,810.47 in Thursday's US session, following the greenback sell-off against major currencies. The US Dollar Index (DXY) slipped below 93.50 following disappoiting US Gross Domestic Product (GDP), which fell 2% in Q3 below market expectations of 2.7%. The downbeat reading bolstered speculations that the other central banks might outpace the Fed in monetary policy normalization.

In addition to that, the latest World Gold Council’s (WGC) report stated that the demand for gold has risen 47% to over 139 tonnes in July- September quarter in India, despite a drop of 7% in global demand. India, being the second largest consumer of gold after China. Gold is perceived as a strong hedge against inflation.

 

Gold (XAU/USD) seeks fresh clues following two-day advances, seesaws around $1,800 during early Friday. Even so, the yellow metal remains on the way to print a three-week run-up by the press time.

Bulls refreshed weekly top the previous day following the US dollar’s slump on the downbeat US Q3 GDP figures and the European Central Bank’s (ECB) failed attempt to tame the Euro.

That said, the US Dollar Index (DXY) posted the heaviest fall in 12 days on Thursday after US Q3 GDP slipped below 2.7% forecast to 2.0%, much lower than 6.7% prior. The softer GDP growth pushes the Fed to slow down on its monetary policy normalization rush. It should be observed that the ECB’s hint to start tapering the monthly bond purchases and the PEPP (Pandemic Emergency Purchase Program) will end next March propelled the Euro and weighed down the USD. The regional central bank left monetary policy unchanged, as expected, with refinancing rate at 0.0% and deposit rates at -0.5%.

Although the greenback gauge remains lackluster by the press time and supports the gold buyers, sour sentiment challenges the commodity’s upside momentum. The same could take clues from an absence of a deal on US President Joe Biden’s $1.75 trillion stimulus package. Recently, US House Speaker Nancy Pelosi conveyed her optimism towards the passage of infrastructure and social spending, climate bills during the phone call to postpone the vote on the infrastructure bill.

To portray the mood, S&P 500 Futures print mild losses while the US 10-year Treasury yields struggle for clear direction around 1.568%.

Given the risk-off mood and an absence of US dollar selling, gold may remain pressured ahead of the key US inflation figures. That said, the Core Personal Consumption Expenditures (PCE) – Price Index for September is likely to ease to 0.2% from 0.3% prior on the MoM basis. The same should add to hopes of a bit slower dial-back of easy money by the Fed, which in turn may exert additional downside pressure on the USD on meeting the forecasts and help gold prices to retail the latest bullish impulse.

Read: Personal Consumption Expenditure Price Index September Preview: Transitory inflation becomes permanent

Technical analysis

Gold (XAU/USD) remains on the front foot inside a two-week-old rising wedge formation amid firmer RSI conditions, not overbought.

Although 50-SMA adds strength to the wedge’s support line around $1,788, gold buyers have repeatedly been rejected by 78.6% Fibonacci retracement (Fibo.) of September’s fall, near $1,810.

Even if the quote manages to cross the $1,810 hurdle, the upper line of the stated wedge close to $1,814 the previous month’s peak of $1,834 will be tough nuts to crack for the gold bulls.

On the contrary, a downside break of $1,788 support confluence will confirm the bearish chart pattern and could aim for September’s bottom of $1,721. During the fall, $1,770 and $1,745 may offer multiple supports to test the gold sellers.

Overall, gold remains in the upward trajectory but the bulls have a bumpy road ahead.

Gold: Four-hour chart

Trend: Further upside expected

Additional important levels

Overview
Today last price 1799.66
Today Daily Change 0.74
Today Daily Change % 0.04%
Today daily open 1798.92
 
Trends
Daily SMA20 1776.24
Daily SMA50 1780.96
Daily SMA100 1788.25
Daily SMA200 1792.79
 
Levels
Previous Daily High 1810.47
Previous Daily Low 1792.43
Previous Weekly High 1813.82
Previous Weekly Low 1760.37
Previous Monthly High 1834.02
Previous Monthly Low 1721.71
Daily Fibonacci 38.2% 1803.58
Daily Fibonacci 61.8% 1799.32
Daily Pivot Point S1 1790.74
Daily Pivot Point S2 1782.57
Daily Pivot Point S3 1772.7
Daily Pivot Point R1 1808.78
Daily Pivot Point R2 1818.65
Daily Pivot Point R3 1826.82

 

 

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: Weekly resistance line, 200-SMA test recovery above 1.1300

EUR/USD pauses corrective pullback from two-month-old support around 1.1330 during the initial Asian session on Tuesday. The major currency pair battles the 200-SMA, as well as a descending trend line from January 17.

EUR/USD News

GBP/USD is testing critical hourly support

GBP/USD is holding tight in somewhat bearish territory below 1.35 the figure. Sterling dropped on Monday to its lowest in three weeks versus the US dollar, with traders moving out of risk and into safe havens due to the expectations of Fed tightening and escalating tensions between Russia and Ukraine.

GBP/USD News

Gold struggles around yearly resistance line with eyes on Fed

Gold bounces off intraday low to extend the previous day’s recovery moves towards a one-year-old descending trend line. That said, the yellow metal picks up bids to $1,841 by the press time of Tuesday’s Asian session.

Gold News

Bitcoin finds buyers despite new six-month and 2022 lows, BTC relief rally on deck

Bitcoin price action on Monday was mainly in a full-blown bear attack, with a new 2022 and six-month lows hit. That all changed near the end of the NY equity market session when buyers poured in to rally Bitcoin higher to close in the green for the second day in a row.

Read more

The sell-off continues as Fed, earnings and Ukraine trigger sell off

US stocks are having yet another calamitous start to the week, both the Nasdaq and the S&P 500 are down more than 3% at the time of writing. The question now is, will this sell off last, or have we been wrong-footed by another strange Monday in the land of investing?

Read more

Forex MAJORS

Cryptocurrencies

Signatures