Gold Price Forecast: XAU/USD buyers stay hopeful whilst above 38.2% Fibo level at $2,700

The US Dollar stalls with Treasury bond yields as Tesla’s earnings report lifts mood.
Technically, Gold price appears a ‘buy-the-dips’ trade, 38.2% Fibo level holds the key.

Dhwani Mehta FXStreet

Gold price is reversing a part of Wednesday’s correction from record highs of $2,759 early Thursday. Gold buyers draw support from a pause in the US Dollar (USD) advance, as the US Treasury bond yields rally takes a breather in the lead-up to the preliminary S&P Global US PMI data.

Gold price looks to US PMI data for further incentives

The minor pullback in the USD alongside the US Treasury bond yields could be attributed to a stabilizing market mood in Asia, following Wall Street’s tech sell-off overnight. US equity futures rebound amid a risk reset after investors breathed a sigh of relief on Tesla Inc.’s encouraging earnings report.

Tesla reported adjusted earnings of 72 cents per share for the quarter, above the average analyst estimate and snapping four consecutive quarters in which the measure missed expectations, per CNBC News. The company said its Cybertruck, which it first delivered late last year, has reached profitability for the first time,

The further upside in Gold price, however, remains at the mercy of the upcoming Euro area and the US preliminary business PMI data. Investors will seek cues on the health of the global economy, impacting risk sentiment and safe-havens such as the USD, Gold price, etc.

The US S&P Global preliminary Manufacturing PMI is seen ticking higher to 47.5 in October from September’s 47.3 while the Services PMI is set to edge a tad lower to 55.0 in the same period from 55.2 in September.

Meanwhile, the market’s nervousness ahead of key US earnings reports and the presidential election will also play its part in driving the sentiment around Gold price. Any potential decline in Gold price is likely to be bought into, as buyers could re-emerge on Gold’s safe-haven demand due to the November 5 US election and the ongoing Middle East conflict.

Gold price technical analysis: Daily chart

Gold price seems to be facing stiff resistance at $2,723, the 23.6% Fibonacci Retracement (Fibo) level of the latest record rally from the October 10 low of $2,604 to an all-time high of $2,759.

Acceptance above that level could encourage buyers to take on the $2,750 psychological barrier. The record high of $2,759 will be next on buyers’ radars.

The 14-day Relative Strength Index (RSI) is flattish but well above the 50 level, currently trading near 65.60, pointing to more upside momentum.

However, if Gold sellers jump back into the game, the 38.2% Fibo level of the same ascent at $2,700 will come to the rescue of buyers.

A sustained move below the latter will put the 50% Fibo support at $2,682 to the test.

The line in the sand for Gold optimists is aligned at the 21-day Simple Moving Average (SMA) at $2,670.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD approaches May highs near 1.3650 on renewed USD selling

GBP/USD approaches the May high, while trading near 1.3650 in the European session on Thursday. The US Dollar slips again even as markets assess whether the US Treasury buyback will be a game-changer. Attention now remains on US data and Middle East headlines for further trading impetus.

EUR/USD hits fresh three-month highs above 1.1700

EUR/USD is at its highest level in three months, above 1.1700, in European trading on Thursday. The pair regains traction as the US Dollar resumes its downside, led by the US Treasury's bond buyback plan.. US Jobless Claims data are next in focus amid lingering Iran risks.

Gold stays in red below $4,500 despite resurgent USD supply

Gold sticks to modest intraday losses and remains below the $4,500 mark in the European session on Thursday. Despite geopolitical uncertainties, the US Dollar loses ground again, resuming the previous day’s slump to a three-month low.

Bitcoin extends gains above $71,000 as liquidity conditions improve

Bitcoin extends its gains, inching toward $72,000 on Thursday, as crypto markets continue to cheer the US Treasury’s decision to double its debt buyback operations. The move has sharply improved market sentiment and liquidity conditions, helped trigger a short squeeze, and overall provided a positive catalyst for the broader crypto market.

The bond coup

Yesterday was marked by a coup from the US Treasury, which suddenly announced that it will ‘at least double’ the maximum size of its buyback operations for longer-term debt, hoping to ease pressure on long-term yields and borrowing costs. Phoah! The markets reacted heavily to the news. The US 10-year yield fell sharply, while the 30-year yield dropped from its highest levels since 2007.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.