Gold Price Forecast: XAU/USD advances toward $1,790 amid softer USD


Update: Gold prices remain on the path for weekly gains on Friday, following the previous four sessions' upside momentum. The selling pressure in the US dollar keeps the precious metal on the gaining spree. The greenback trades below 94.00 since the beginning of the week despite higher US Treasury yields. Lower USD valuations make gold attractive to the other currencies holders.

Investors remain skeptical about the US rate hike bets. New York  Federal Reserve (Fed) President John Williams said long-run inflation expectations are in line with the central bank’s 2% goal. Few other Fed members played down rate hike prospects but remained affirmative on reducing the bond-buying measures.

The improved risk sentiment, following China’s Evergrande payment news, kept the gains limited in the bullion. Evergrande made a payment of $83.5 million in lieu of the bond interest on Thursday.

 

Gold (XAU/USD) refreshes intraday high to $1,787 during the four-day run-up amid early Friday. The yellow metal witnessed pullback the previous day amid firmer US dollar, on relation fears, but the latest sentiment-positive headlines seem to have favored the gold buyers.

Among the positive headlines were US President Joe Biden’s optimism for the infrastructure deal during the CNN town hall event and Evergrande news. Also favoring the risk appetite could be the vaccine news.

“President Joe Biden said on Thursday he was close to striking a deal to pass major infrastructure and social spending measures, after weeks of intraparty bickering among his fellow Democrats,” per Reuters.

On the other hand, the South China Morning Post (SCMP) tried to soothe the Evergrande-led jitters while citing the company filing with the Hong Kong stock exchange. “China Evergrande rival Hopson Development Holdings Limited, which had sought to buy half of the embattled developer’s property management unit, still considers the purchase agreement ‘legally binding’ despite Evergrande rescinding the sale on October 12,” said SCMP.

Additionally, China’s Securities Times came out with the news suggesting Evergrande paid an $83.5 million bond interest payment.

It should be noted that Federal Reserve Governor Christopher Waller said that the next few months will be critical to see whether inflation is transitory, as reported by Reuters. Before that, Federal Reserve Governor Randal Quarles and Cleveland Fed President Loretta Mester highlighted inflation fears. Even so, mixed US data questioned pessimists but also didn’t allow the equity bulls to dominate further.

Against this backdrop, the S&P 500 Futures pare early Asian losses, down 0.07% at the latest, whereas the US 10-year Treasury yields remain firmer around 1.70%, recently up 1.9 basis points (bps) near 1.694%. Further, the US Dollar Index (DXY) keeps the previous day’s rebound near 93.75 by the press time.

Moving on, risk catalysts may entertain the gold traders ahead of the preliminary reading of October Markit Manufacturing PMI, expected 60.3 versus 60.7 prior. Given the fears of inflation, any further strength in the key data and/or details can propel the US dollar and weigh on the gold prices near the short-term key hurdle.

Technical analysis

Gold buyers battle inside a monthly rising wedge bearish chart pattern amid mixed signals from the MACD histogram and RSI line. Though, the 200-SMA and support line of the stated chart formation offers a tough nut to crack for the sellers around $1,769.

On the contrary, recovery moves need to post a clear run-up through the monthly horizontal resistance surrounding $1,790 to call back the gold buyers.

Following that, the monthly peak of $1,800 and the upper line of the wedge, close to $1,806, will precede the mid-September high of $1,808 to entertain the gold bulls. However, any further upside will need validation from the key $1,834 hurdle that stopped advances in July and September.

It’s worth noting that a downside break of $1,769 will theoretically trigger the south-run targeting the sub-$1,700 area. During the fall, multiple supports around $1,747 and $1,732 can test the gold sellers.

Overall, gold prices fade upside momentum but the bears need clear signals for entry.

Gold: Four-hour chart

Trend: Pullback expected

Additional important levels

Overview
Today last price 1786.1
Today Daily Change 3.12
Today Daily Change % 0.17%
Today daily open 1782.98
 
Trends
Daily SMA20 1762.7
Daily SMA50 1779.61
Daily SMA100 1793.06
Daily SMA200 1793.95
 
Levels
Previous Daily High 1789.48
Previous Daily Low 1776.58
Previous Weekly High 1800.62
Previous Weekly Low 1750.24
Previous Monthly High 1834.02
Previous Monthly Low 1721.71
Daily Fibonacci 38.2% 1784.55
Daily Fibonacci 61.8% 1781.51
Daily Pivot Point S1 1776.55
Daily Pivot Point S2 1770.11
Daily Pivot Point S3 1763.65
Daily Pivot Point R1 1789.45
Daily Pivot Point R2 1795.91
Daily Pivot Point R3 1802.35

 

 

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 climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.

EUR/USD News

GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.

GBP/USD News

Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures