Contents
On Tuesday, the XAU/USD, symbolizing the gold price. Experienced a resurgence in buying interest, marking a substantial recovery of approximately $125 from its recent record high in the range of $2,144 to $2,145. A technical analysis reveals caution among bullish traders due to the recent breach below the 50% Fibonacci retracement level of the multi-week rally. Nevertheless, indicators on the daily chart signal a moderation from previously overbought conditions, maintaining a secure position in positive territory.
Additionally, the presence of a golden cross. Where the 50-day Simple Moving Average (SMA) has surpassed the 200-day SMA. Indicates a persistent upward trajectory for the gold price.
Highlights:
- Gold Rebounds: XAU/USD surged $125 from recent highs, signaling renewed buying interest.
- Technical Caution: Caution prevails among traders as the 50% Fibonacci retracement level is breached, but daily indicators show moderation.
- Golden Cross Signal: A golden cross, where the 50-day SMA surpasses the 200-day SMA. Indicates a consistent upward trend for Gold.
- Market Dynamics: Mixed cues and a slight USD uptick challenge Gold, yet geopolitical concerns and a global economic downturn sustain a bid tone. Traders closely monitor economic releases and job reports for Gold’s future trajectory.
Gold Price Outlook: Key Levels and Potential Movements
In the event of an upward movement, potential resistance anticipated around the $2,045 to $2,046 range. Beyond this level, a sustained advance could propel XAU/USD to the subsequent significant obstacle near the $2,070 region. Continuation of buying momentum may facilitate the reclaiming of the $2,100 psychological level. Conversely, a downside move is likely to find support in the $2,026 to $2,020 range. Acting as an immediate buffer ahead of the 61.8% Fibonacci retracement level situated around the $2,012 zone. As well as the pivotal $2,000 psychological threshold. A definitive breach below the latter would signify a potential near-term peak for the gold price. Paving the way for a more pronounced downward movement.
Gold Price Surges $125, Faces Mixed Market Signals Amid Fed Chair’s Caution
The Gold price (XAU/USD) witnessed renewed buying interest on Tuesday. Experiencing a notable turnaround of nearly $125 from its previous record peak in the $2,144-2,145 range. Although the precious metal maintained modest gains during the early European session, it lacked sustained momentum amid mixed market cues. In a Friday speech, Federal Reserve (Fed) Chair Jerome Powell countered speculations of more aggressive rate cuts, emphasizing that it would be premature to determine when policy easing might occur. Nevertheless, market sentiment seems convinced that the US central bank has concluded its policy-tightening efforts, with an even chance of a rate cut as early as March 2024 now being factored in.
Also Read: EUR/USD Down to 1.0800 as the US Dollar Initiates a Rebound
Factors Influencing Gold: USD Uptick Challenges
Additionally, a slight uptick in the US Dollar (USD) poses as another factor hindering the Gold price. However, the safe-haven XAU/USD sustains its bid tone due to concerns about a broader conflict in the Middle East. This, coupled with a dimming global economic outlook, contributes to a weaker tone in global equity markets. Meanwhile, the global flight to safety prompts a decline in US Treasury bond yields against the backdrop of dovish Fed expectations, suggesting a limitation on the upside for the USD and indicating that the prevailing direction for the precious metal leans towards the upside.
Market participants are currently focused on the US economic calendar, awaiting the release of the ISM Services PMI and JOLTS Job Opening data for potential market impetus during the North American session. Subsequently, attention will shift to the US ADP report on private-sector employment scheduled for Wednesday, with continued focus on the official monthly jobs report, known as Nonfarm Payrolls (NFP). The NFP figures will provide fresh insights into labor market conditions, potentially influencing the Fed’s near-term policy outlook and driving demand for the Gold price.
