Gold Price Forecast: XAU/USD licks its wounds on the way to $1,720, Fed Minutes eyed

  • Gold price rebounds from intraday low to pare recent losses ahead of the key catalysts.
  • Market sentiment remains sluggish as holiday in Japan restricts bond moves, pre-data caution also challenges XAU/USD traders.
  • Bullion bears await the clear signs of Fed’s 75 bps rate hike in December.

Gold price (XAU/USD) picks up bids to consolidate the intraday losses around $1,738 during early Wednesday morning in Europe.

In doing so, the yellow metal cheers the US Dollar weakness ahead of the key data/events scheduled for publishing today. Also likely to have recently favored the metal prices could be the mixed signals from China, despite spreading the coronavirus woes. However, the market’s cautious mood and hopes of hawkish central bank actions join the pessimism surrounding Beijing to keep the XAU/USD bears hopeful.

US Dollar Index (DXY) takes offers to refresh the intraday low near 106.95, down for the second consecutive day, as the US Treasury yields remain pressured as European markets become active. The bond coupons remained mostly sluggish and allowed the DXY bears to take a breather earlier in the day amid a holiday in Tokyo. The reason could be linked to Japan’s status as Asia’s major bond trader.

Recently firmer US data and mixed comments from the Federal Reserve (Fed) officials seemed to have challenged the hawkish expectations from the US central bank, which in turn reduces the US Dollar’s safe-haven demand.

Elsewhere, China’s daily coronavirus counts head towards the record top marked in April while the virus numbers from Beijing, Shanghai and Chongqing also increased. On the same line were headlines from the South China Morning Post (SCMP) quoting Nomura’s Chief Economist Lu Ting as saying, “China’s economic growth next year appears to entirely hinge on a potential exit from its zero-covid policy, and even if such a shift occurs, more pain is inevitable before the real recovery.”

However, an absence of any virus-led deaths from Beijing, after the previous day’s two, joins hopes of recovery and more stimulus to underpin the XAU/USD rebound.

Amid these plays, the US stock futures remain sluggish but the equity traders in Europe and the UK appear optimistic after the previous day’s upbeat closing of Wall Street.

Hence, a likely cautious optimism could help the metal prices to pare recent losses but the overall pessimism surrounding China and Fed’s next moves can weigh on the XAU/USD prices.

Also read: Gold Price Forecast: Federal Reserve minutes could help XAU/USD confirm a bull flag

Technical analysis

A sustained U-turn from the multi-day-old resistance line joins the 10-DMA breakdown and impending bear cross on the Moving Average Convergence and Divergence (MACD) indicator to keep the Gold sellers hopeful.

That said, tops marked in September and October, respectively near $1,735 and $1,729, lure the intraday sellers of the XAU/USD ahead of highlighting the previous resistance line from September 12, around $1,720.

In a case where the yellow metal remains bearish past $1,720, July’s low of $1,680 will be in focus.

Meanwhile, the 50% Fibonacci retracement level of Gold’s June-September downturn, near $1,748, restricts immediate recovery of the metal ahead of the 10-DMA level of $1,757.

It’s worth noting, however, that the XAU/USD bulls should remain cautious unless witnessing a clear upside break of the $1,778 resistance confluence, comprising the previously stated resistance line from July 04 and the 61.8% Fibonacci retracement level.

Gold price: Daily chart

Trend: Further downside expected

Additional important levels

Today last price 1738.04
Today Daily Change -2.39
Today Daily Change % -0.14%
Today daily open 1740.43
Daily SMA20 1706.46
Daily SMA50 1682.38
Daily SMA100 1711.67
Daily SMA200 1800.81
Previous Daily High 1749.81
Previous Daily Low 1737.1
Previous Weekly High 1786.55
Previous Weekly Low 1747.6
Previous Monthly High 1729.58
Previous Monthly Low 1617.35
Daily Fibonacci 38.2% 1744.95
Daily Fibonacci 61.8% 1741.96
Daily Pivot Point S1 1735.08
Daily Pivot Point S2 1729.74
Daily Pivot Point S3 1722.37
Daily Pivot Point R1 1747.79
Daily Pivot Point R2 1755.16
Daily Pivot Point R3 1760.5



Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

AUD/USD trades below 0.6900 as investors await RBA’s announcement Premium

AUD/USD trades below 0.6900 as investors await RBA’s announcement

The AUD/USD pair fell to 0.6854, recovering ahead of the US close but holding sub-0.6900. A dismal market mood and the upcoming Reserve Bank of Australia monetary policy decision are weighing on the pair.


EUR/USD stays pressured towards 50-DMA support

EUR/USD stays pressured towards 50-DMA support

EUR/USD licks its wounds at the lowest levels in a month, depressed around 1.0725 during early Tuesday in Asia. That said, the major currency pair dropped during the last consecutive three days.


Gold eyes more weakness below $1,860 as yields soar, Fed Powell’s speech eyed

Gold eyes more weakness below $1,860 as yields soar, Fed Powell’s speech eyed

Gold price is displaying a sideways auction after building a cushion around $1,860.00 in the early Asian session. The precious metal is expected to display more weakness after surrendering immediate support as US Treasury yields are gaining dramatically.

Gold News

Hedera Hashgraph: A potential bullrun with caution

Hedera Hashgraph: A potential bullrun with caution

Hedera Hashgraph price shows potential to continue its uptrend. The consolidation phase could be viewed as a buying opportunity in hindsight. However, the risk to the downside should be considered.

Read more

Reserve Bank of Australia Preview: No choice but to keep hiking rates Premium

Reserve Bank of Australia Preview: No choice but to keep hiking rates

The Reserve Bank of Australia (RBA) will announce its monetary policy decision on February 7, with the Board expected to pull the trigger by another 25 basis points (bps). The RBA has been among the first to reduce the pace of tightening, opting for 25 bps hikes in October.

Read more