Gold Price Forecast: 50 DMA appears a tough nut to crack for XAU/USD bulls ahead of US data
Premium|Take advantage of 75% OFF on your first month.
Grab this special offer, it's a 1 year for FREE deal! And access ALL our articles and analysis.
You have reached your limit of 5 free articles for this month.
BLACK FRIDAY SALE! 75% OFF!
Grab this special offer, it's a 1 year for FREE deal! And access ALL our articles and analysis.
CLAIM OFFER- Gold price is pausing its rally, as the dollar perks up ahead of key US data.
- Treasury yields also see renewed uptick amid the return of aggressive Fed rate hike bets.
- XAU/USD needs clearance of the 50 DMA for a move towards $1,750.
Gold price is fading its bullish momentum this Wednesday, as it eases from three-week highs of $1,730 amid resurgent safe-haven demand for the US dollar. The greenback is drawing support from the revival in the bets for aggressive Fed tightening after the RBNZ delivered a hawkish rate hike and poured cold water on investors’ expectations for a slowdown in the Fed’s rate hike pace. The same is being translated into higher Treasury yields across the curve, curbing the appeal of the non-yielding bullion. Markets are now eagerly awaiting the US employment data and the ISM Services PMI to gauge the strength of the economy, which could have a significant impact on the size of the next Fed rate hikes. The US private sector is expected to add 200K jobs in September while the closely watched ISM Services Price Paid component is expected to ease to 69.8 in the reported period.
Also read: Gold Price Forecast: XAU/USD faces a wall of resistance ahead of key US events – Confluence Detector
XAU/USD extended its winning streak into the second straight day on Tuesday and reached the highest level since September 13, as the US dollar correction picked up steam following the release of the JOLTS Job Openings data. Fears over US economic slowdown resurfaced and weighed on aggressive Fed tightening bets after US job openings plunged to 10.1 million in August, the lowest since June 2021. Stocks jumped while yields dropped after the report, underpinning the non-interest-bearing gold price.
Gold price technical outlook: Daily chart
Gold price took advantage of the upside break of the falling trendline resistance at the start of the week and extended its upsurge beyond $1,700.
However, the bearish 50-Daily Moving Average (DMA) at $1,724 played a spoilsport and tempered its rally.
At the time of writing, the bright metal is struggling with the 50 DMA barrier, as the 14-day Relative Strength Index (RSI) has turned south despite being above the midline.
The pullback in the bullion appears temporary, as the technical setup continues to favor bulls.
A sustained break above the 50 DMA is needed to challenge the September highs at $1,735, above which the $1,750 psychological level will come into play.
On the downside, the previous critical ressitance now support at $1,700 could offer temporary reprieve to buyers, below which the the previous day’s low of $1,695 could be revisited.
Powerful support at $1,680 will be the last line of defense for gold bulls. That level is the confluence of the mildly bullish 21 DMA and the falling trendline resistance-turned-support.
- Gold price is pausing its rally, as the dollar perks up ahead of key US data.
- Treasury yields also see renewed uptick amid the return of aggressive Fed rate hike bets.
- XAU/USD needs clearance of the 50 DMA for a move towards $1,750.
Gold price is fading its bullish momentum this Wednesday, as it eases from three-week highs of $1,730 amid resurgent safe-haven demand for the US dollar. The greenback is drawing support from the revival in the bets for aggressive Fed tightening after the RBNZ delivered a hawkish rate hike and poured cold water on investors’ expectations for a slowdown in the Fed’s rate hike pace. The same is being translated into higher Treasury yields across the curve, curbing the appeal of the non-yielding bullion. Markets are now eagerly awaiting the US employment data and the ISM Services PMI to gauge the strength of the economy, which could have a significant impact on the size of the next Fed rate hikes. The US private sector is expected to add 200K jobs in September while the closely watched ISM Services Price Paid component is expected to ease to 69.8 in the reported period.
Also read: Gold Price Forecast: XAU/USD faces a wall of resistance ahead of key US events – Confluence Detector
XAU/USD extended its winning streak into the second straight day on Tuesday and reached the highest level since September 13, as the US dollar correction picked up steam following the release of the JOLTS Job Openings data. Fears over US economic slowdown resurfaced and weighed on aggressive Fed tightening bets after US job openings plunged to 10.1 million in August, the lowest since June 2021. Stocks jumped while yields dropped after the report, underpinning the non-interest-bearing gold price.
Gold price technical outlook: Daily chart
Gold price took advantage of the upside break of the falling trendline resistance at the start of the week and extended its upsurge beyond $1,700.
However, the bearish 50-Daily Moving Average (DMA) at $1,724 played a spoilsport and tempered its rally.
At the time of writing, the bright metal is struggling with the 50 DMA barrier, as the 14-day Relative Strength Index (RSI) has turned south despite being above the midline.
The pullback in the bullion appears temporary, as the technical setup continues to favor bulls.
A sustained break above the 50 DMA is needed to challenge the September highs at $1,735, above which the $1,750 psychological level will come into play.
On the downside, the previous critical ressitance now support at $1,700 could offer temporary reprieve to buyers, below which the the previous day’s low of $1,695 could be revisited.
Powerful support at $1,680 will be the last line of defense for gold bulls. That level is the confluence of the mildly bullish 21 DMA and the falling trendline resistance-turned-support.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.