- Gold price has displayed some correction after posting a fresh YTD high at $2,079.76.
- The Fed announced that further monetary policy decisions would be highly dependent on incoming data.
- Investors are worried that US labor market conditions are still tight and could accelerate persistent inflation.
Gold price (XAU/USD) has witnessed a steep fall after printing a fresh year-to-date (YTD) high placed at $2,067.00 in the early Asian session. The yellow metal has attracted significant offers as the US Dollar Index (DXY) has attempted a recovery. Earlier, the precious metal gained immense strength as the Federal Reserve (Fed) signaled a pause in the policy-tightening spell from June after hiking interest rates by 25 basis points (bps) to 5.00-5.25%.
Fed chair Jerome Powell announced that further monetary policy decisions would be highly dependent on incoming data. The Fed is moving from its prior language of ‘some additional policy firmly’ to ‘closely monitoring incoming information’ suggesting that monetary policy is restrictive enough for now to curb sticky inflation.
Meanwhile, S&P500 futures settled Wednesday’s session on a bearish note after surrendering stellar gains amid uncertainty over the further path of arresting sticky inflation, portraying a risk-aversion theme.
The US Dollar Index (DXY) is showing signs of recovery after a steep correction to near 101.26. Investors are worried that the United States labor market conditions are still tight and could accelerate persistent inflation.
On Wednesday, the US Automatic Data Processing (ADP) agency showed an addition of fresh payrolls at 296K vs. the estimates of 150K and the former release of 145K. If incoming information continues to remain expansionary in this way, the Fed won’t have another option than to hike interest rates further.
Gold technical analysis
Gold price has sensed selling pressure after printing a fresh YTD at $2,079.76 as profit-booking kicked in. The precious metal has conquered its prior resistance plotted from 07 August 2020 high at $2,075.22. Intermediate support is placed from April 21 low at $1,969.29.
The 10-period Exponential Moving Average (EMA) at $1,973.73 is providing cushion to the Gold bulls.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, indicating a continuation of the upside momentum.
Gold weekly chart
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 bounces back, trades above 1.0860
EUR/USD bounced from a fresh weekly low of 1.0827, as the US Dollar lost steam following a weak ISM Manufacturing PMI report and words from Federal Reserve Chair Jerome Powell. Powell reiterated its hawkish message, dismissing potential rate cuts in the near future.
GBP/USD turns north ahead of the weekly close, approaches 1.2700
GBP/USD extended its rebound from near 1.2600 and is approaching 1.2700 on the back of a weaker US Dollar. The Greenback accelerated to the downside following comments from Fed’s Powell.
Gold resumes advance and approaches record highs
Gold remains near record highs and achieved its highest monthly close ever in November. Global bond yields continue to decline as inflation further cools, supporting the upside in XAU/USD. With central banks expected to remain on hold, the focus will be US labor market data.
Solana likely to extend gains as DeFi airdrop season could boost user base
Solana ecosystem will see airdrops from projects like Jupiter, Marginfi, Drift, Zeta and Jito. Solana users are projected to increase between 30% and 80% from native token launches, according to Messari’s latest report. SOL price extends rally, yielding nearly 4% daily gains.
Tesla Stock News: Cybertruck excitement fails to sustain TSLA price as chart signals more downside
TSLA stock sinks three days in a row despite Cybertruck unveiling. Analysts conclude that Cybertruck will find it difficult to turn a profit. TSLA stock is the midst of forming a bearish Three Black Crows pattern on the daily chart.