- Gold price stays defensive after reversing from 21-DMA.
- DXY picks up bids to reverse early Asian session losses amid mixed concerns.
- Yields stay downbeat in absence of Fedspeak, pre-data anxiety.
- XAU/USD may remain sidelined ahead of US CB Consumer Confidence, Q3 GDP.
Gold price (XAU/USD) remains directionless while bouncing off intraday low to $1,650 heading into Tuesday’s European session.
That said, the yellow metal lured buyers earlier in the day amid a softer US dollar but the greenback’s latest rebound appears to have weighed on the quote of late. It should be noted that the negative concerns surrounding China, one of the world’s biggest gold consumers, also challenge the precious metal prices of late.
US Dollar Index (DXY) picks up bids to regain the 112.00 threshold while paring the first weekly loss in three amid an absence of Fedspeak. It should be noted that the hawkish Fedspeak and downbeat US PMIs also underpin the DXY’s safe-haven demand.
China’s efforts to defend the struggling economy and global pessimism over Xi Jinping's third term, not to forget Hang Seng’s slump to a 13-year low, exert downside pressure on the market sentiment and the XAU/USD prices.
Amid these plays, the US 10-year Treasury yields remain pressured around 4.21%, down two basis points (bps) while the US stock futures and stocks in the Asia-Pacific region are mildly bid.
Moving on, second-tier US Housing data and Consumer Confidence figures may entertain gold traders ahead of Thursday’s US Gross Domestic Product for the third quarter (Q3).
Technical analysis
Gold retreats inside a two-week-old bearish megaphone. That said, the recent downside RSI and the quote’s pullback from the trend-widening pattern’s resistance line direct it toward the 100-EMA support near $1,645.
However, the metal’s further downside appears elusive as the yearly bottom near $1,614 and the lower line of the stated megaphone, close to $1,608, could challenge the XAU/USD bears afterward. Also acting as a downside filter is the $1,600 threshold, a break of which could direct the prices toward the April 2020 low near $1,572.
Meanwhile, the stated formation’s upper line and the 61.8% Fibonacci retracement of the metal’s upside from September 28 to October 04, around $1,658-60, appear a tough nut to crack for the gold buyers.
Overall, the bullion prices are likely to remain pressured but the south run could be a slower one.
Gold: Hourly chart
Trend: Further weakness expected
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