During Thursday’s Asian trading window, GOLD (XAU/USD) surged, hitting its highest level in two weeks. The robust recuperation from last week’s seven-month nadir of $1,810 reflects gold’s revived appeal as a preferred safe-haven asset. This is buoyed by escalating tensions in the Middle East and a receding US Dollar. Concurrently, the dip in global bond yields is amplifying gold’s allure.
Despite the equity market’s generally upbeat sentiment, gold’s uptick reflects a recovery of over a third of its September losses. Speculation that the Federal Reserve may be concluding its rate-hike phase suggests a bullish inclination for XAU/USD. Market participants, however, might await the impending US consumer inflation data.
However, an inflation uptick could leave room for another Fed rate increase this year, potentially triggering profit-taking in XAU/USD.
Gold Technical Briefing
Gold’s consistent trajectory beyond the $1,865-1,866 zone overnight might prelude a climb towards the proximate $1,885 barrier. Yet, while daily chart technical indicators have shifted from the bearish realm, they haven’t fully embraced a bullish sentiment. Thus, any upward progression could face significant resistance near the key $1,900 level. A sustained buying momentum might prompt bullish investors, steering gold towards challenging the 200-day SMA, hovering around the $1,928-1,930 vicinity.
Conversely, the prior resistance zone of $1,866-1,865 could now act as a downside cushion, preceding the $1,853-1,850 bracket. A subsequent support level emerges around $1,835-1,833, echoing a resistance level from a past trading range. Breaching this might reverse gold’s short-term optimism, exposing it to a revisit of the recent multi-month nadir near $1,810.
www.fxleaders.com