- Gold price is retesting the breakdown of the Rising Channel pattern amid a delay in US debt-ceiling issues.
- A slower pace in the expansion of US Retail Sales has strengthened expectations of a steady monetary policy stance by the Fed.
- The postponement of approval for the debt-ceiling cap has improved demand for US government bonds.
Gold price (XAU/USD) has shown some buying interest after dropping below $1,990.00 in the Tokyo session. The precious metal has witnessed some recovery as the US Dollar Index (DXY) is struggling in extending its upside move further above 102.70. The Gold price has yet not developed a strong upside bias as it needs to pass through more filters for gaining traction.
S&P500 futures have added decent gains in Asia despite the postponement of approval for raising the US Treasury borrowing cap limit. One thing is for sure that the approval of default is off the table. Every delegate has admitted that the US debt-ceiling cannot be raised along with bulking spending initiatives as it could be a disaster.
The postponement of approval for the debt-ceiling cap has improved demand for US government bonds. This has led to a decline in 10-year US Treasury yields to 3.53%.
The USD Index is facing barricades in extending its recovery above 102.70 as a slower pace in the expansion of US Retail Sales has strengthened expectations of a steady monetary policy stance by the Federal Reserve (Fed). The economic data expanded at a slower pace of 0.4% against the estimate of 0.7%. A mild expansion is insufficient to impact expectations for a steady monetary policy by the Fed.
Gold technical analysis
Gold price has delivered a breakdown of the Rising Channel chart pattern formed on a four-hour scale, however, the breakdown needs to pass some more filters yet. An intermediate resistance is plotted from May 05 low at $1,999.54. Downward-sloping 10-period Exponential Moving Average (EMA) at $2,000.00 is barricading the Gold bulls.
The Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates more downside ahead.
Gold four-hour 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
NZD/USD holds steady above multi-week low, looks to RBNZ for fresh impetus
NZD/USD consolidates below mid-0.6100s as traders opt to wait on the sidelines ahead of the Reserve Bank of New Zealand rate decision. Heading into the key central bank event risk, expectations for a jumbo RBNZ rate cut fail to assist the pair in capitalizing on the overnight bounce from the 0.6100 mark, or a four-week low.
AUD/USD faces the next support at 0.6700
AUD/USD retreated further and approached the key 0.6700 contention zone, where some initial support seems to have turned up, always against the backdrop of a persistent risk-off mood in the global markets.
Gold price slips on Middle East truce calls, clings above $2,600
Gold prices slumped sharply on Tuesday following a strong US jobs report and newswires revealing that Hezbollah supported calls for a truce in the conflict between them and Israel. Hence, hints of a possible de-escalation of the Middle East conflict opened the door for traders to book profits.
RBNZ seen cutting key interest rate by 50 bps in October amid deepening economic downturn
The Reserve Bank of New Zealand is expected to cut interest rates by 50 bps to 4.75% on Wednesday. New Zealand’s deepening economic downturn and inflation optimism flag outsized RBNZ rate cut bets.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.