• Gold struggles to preserve its intraday gains to a fresh weekly high touched this Friday.
  • The prospects for aggressive policy tightening by the Fed continue to act as a headwind.
  • The emergence of fresh USD buying exerts additional downward pressure on the metal.

Gold surrenders a major part of its intraday gains to a fresh weekly high touched earlier this Friday and retreats below the $1,665 level during the early North American session.

Despite growing recession fears and geopolitical risk, the safe-haven XAU/USD has been struggling to gain any meaningful traction amid the Federal Reserve’s commitment to getting inflation under control. Investors seem convinced that the US central bank will stick to its aggressive rate hiking cycle and have been pricing in the possibility of another supersized 75 bps rate hike in November. The bets were reaffirmed by Friday's release of the US Personal Consumption Expenditures (PCE) data, which continues to act as a headwind for the non-yielding gold.

Apart from this, resurgent US dollar demand turns out to be another factor exerting additional downward pressure on the dollar-denominated commodity. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, stages a solid recovery from the weekly low and for now, seems to have stalled this week's sharp pullback from a two-decade high. That said, the spillover effect of the Bank of England's move to calm the markets drags the benchmark 10-year US Treasury note further away from a 12-year high set on Wednesday.

This, in turn, is seen holding back the USD bulls from placing aggressive bets. Apart from this, the prevalent risk-off environment offers some support to gold and should help limit the downside, at least for the time being. Nevertheless, the precious metal remains on track to register the sixth successive month of losses and the biggest quarterly fall since early 2021.

Technical levels to watch

XAU/USD

Overview
Today last price 1663.66
Today Daily Change 3.07
Today Daily Change % 0.18
Today daily open 1660.59
 
Trends
Daily SMA20 1681.83
Daily SMA50 1726.31
Daily SMA100 1767.12
Daily SMA200 1825.35
 
Levels
Previous Daily High 1664.93
Previous Daily Low 1641.59
Previous Weekly High 1688.11
Previous Weekly Low 1639.85
Previous Monthly High 1807.93
Previous Monthly Low 1709.68
Daily Fibonacci 38.2% 1656.01
Daily Fibonacci 61.8% 1650.51
Daily Pivot Point S1 1646.48
Daily Pivot Point S2 1632.36
Daily Pivot Point S3 1623.14
Daily Pivot Point R1 1669.82
Daily Pivot Point R2 1679.04
Daily Pivot Point R3 1693.16

 

 

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