Gold Price Forecast: XAU/USD struggles to remain above $1,940 as fears of US banking crisis recede

Gold price is making efforts for maintaining its auction above $1,940.00.
The recent rally in the Gold price was driven was weakness in the USD Index and fears of a banking sector meltdown.
The USD Index is showing a subdued performance as odds for a 25bp rate hike by the Fed are accelerating.

Sagar Dua FXStreet

Gold price (XAU/USD) has reverted to the $1,940.00 support after failing to extend its recovery above $1,946.00 in the Asian session. The precious metal is expected to remain sideways as investors are likely to execute meaningful positions after the announcement of the interest rate decision by the Federal Reserve (Fed).

It is worth noting that the Gold price is struggling to maintain its feet despite a subdued performance by the US Dollar Index (DXY). The recent rally in the Gold price was driven was weakness in the USD Index and stalwart fears of a banking sector meltdown in the United States after the collapse of three mid-size banks last week.

The commentary from United States Treasury Secretary Janet Yellen that Fed’s new Bank Term Funding facility and discount window lending are working to provide liquidity to the banking system has trimmed fears of further turmoil in the banking system. Also, the statement infused fresh blood into the share price of First Republic Bank on Tuesday. Earlier, the safe-haven appeal for Gold got firmer as investors shifted their money to bullions to safeguard themselves from sheer volatility.

The US Dollar Index (DXY) is continuously hovering around 103.20 as investors are cheering accelerating odds for a 25 basis point (bp) interest rate hike by the Fed. As per the CME Fedwatch tool, 85% chances are in favor of a 25bp rate hike, which would push rates to 4.75-5.00%.

Gold technical analysis

Gold price delivered a perpendicular decline after a breakdown of the Head and Shoulder chart pattern on an hourly scale. A breakdown of the aforementioned chart pattern indicates a bearish reversal after a consolidation move. The Gold price has dropped to near the demand zone placed in a range of $1,933.90-1,938.40.

The 20-period Exponential Moving Average (EMA) at around $1,950.00 would continue to act as a barricade for Gold bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, which indicates the downside momentum is still active.

Gold hourly chart

XAU/USD

Overview
Today last price	1940.53
Today Daily Change	0.29
Today Daily Change %	0.01
Today daily open	1940.24

Trends
Daily SMA20	1868.58
Daily SMA50	1883.03
Daily SMA100	1830.53
Daily SMA200	1778.41

Levels
Previous Daily High	1985.25
Previous Daily Low	1935.48
Previous Weekly High	1989.51
Previous Weekly Low	1867.66
Previous Monthly High	1959.8
Previous Monthly Low	1804.76
Daily Fibonacci 38.2%	1954.49
Daily Fibonacci 61.8%	1966.24
Daily Pivot Point S1	1922.06
Daily Pivot Point S2	1903.89
Daily Pivot Point S3	1872.29
Daily Pivot Point R1	1971.83
Daily Pivot Point R2	2003.43
Daily Pivot Point R3	2021.6

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.