Gold Price Prediction: Bears Are Not Fazed By Risk
XAU / USD Current Price: $ 1,794.19
- US Treasury yields are falling sharply, weighing heavily on the greenback.
- FOMC meeting minutes and hawkish US officials pave the way for reduction.
- XAU / USD broke above critical Fibonacci resistance, aiming at 1.808.63.
Gold is moving on the back of a much weaker dollar, the latter being penalized by falling yields on US government bonds. The release of US inflation figures, revised up to 5.4% yoy in September, was the last catalyst before the release of the FOMC meeting minutes. XAU / USD is trading at around $ 1,794 per troy ounce, its highest level in nearly a month, as latest US CPI confirms policymakers’ determination to start the cut before year end .
The dollar remains in retreat ahead of the minutes of the FOMC meeting. Fed officials have kept the speed reduction rhetoric alive these days, despite a dismal jobs report. In September, Chef Jerome Powell and Co delivered a hawkish message, anticipating the reduction “may soon be warranted.” The document should be hawkish, although it should be noted that it was produced before the last dismal report on nonfarm wages.
Meanwhile, US stocks are trading in a mixed fashion. The European indices mostly closed higher, but with limited gains. The yield on the 10-year US Treasury bill stands at around 1.55% after a low of 1.52%.
Short-term technical outlook for the price of gold
XAU / USD is trading above the 61.8% retracement of its last daily decline at 1,777.75, the immediate support level. The daily chart shows that the metal tested lower to a flat SMA of 20, while the rally stalled around a bearish SMA of 200. In the same chart, technical indicators rose sharply, reflecting the current momentum.
In the short term and according to the 4 hour chart, gold is poised to extend its advance. The price has broken all of its moving averages, as technical indicators maintain their upward slope despite being in overbought territory. The next relevant resistance level and a possible bullish target is 1,808.63, the September 14 high.
Support Levels: 1,777.75 1,764.35 1,748.05
Resistance Levels: 1,796.17 1,808.63 1,820.02
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