Gold Price Analysis: XAU/USD softening ahead of impending RBA rate hike and China data
|- Spot Gold is settling back from $1,990 as US Treasury yields tick higher.
- Market sentiment is drawing tight in early Tuesday action with a 25 bps rate hike expected from RBA.
- China data also on the docket for Tuesday's early market session.
Gold prices went lower again on Monday, declining 0.75% into $1,977 as US Treasury yields stepped higher once more, pushing the XAU/USD back down after losing the $2,000 handle last Friday.
Gold has faced rejection from the $2,000 handle several times in two weeks, and a technical ceiling could be baking into the XAU/USD.
Tuesday kicks things off with a handful of China data on the economic calendar, to be followed by a broadly-expected 25 basis point rate hike from the Reserve Bank of Australia (RBA).
Before the RBA's forecast rate hike lands on markets, China Trade Balance data lands in the Aisa early Tuesday market session.
China's Exports and Imports are both expected to improve for the year into October; China YoY Exports are forecast to print at -3.1% compared to September's reading of -6.2%.
Meanwhile, annualized Imports for October are forecast to see much less upside, but still improve with a market median forecast of -5.4% compared to September's -6.2%.
With a firmer rebound on the cards for Exports, China's overall Trade Balance for the year into October is expected to print on the upside to $81.85B in US Dollar (USD) terms, compared to September's showing of $77.71B USD.
Forex Today: US Dollar looks vulnerable, RBA expected to raise rates
XAU/USD Technical Outlook
Spot Gold looks set to see a bearish correction on the daily candlesticks barring any bullish resurgence, with XAU/USD beginning to test further away from the $2,000 major handle with each rejection.
Gold bids are looking exhausted trading into seven-month highs, and technical indicators are beginning to flash warning signs of an impending bear move.
The Relative Strength Index (RSI) hit overbought conditions in the last week of October, while the Moving Average Convergence-Divergence (MACD) indicator is seeing a bearish rollover of the signal MA line.
Gold bids are facing potential overbought price levels, and technical support sits at the 200-day Simple Moving Average (SMA), currently grinding higher towards $1,940 and the 21-day Exponential Moving Average (EMA) seeing some lift into $1,960.
Near-term trend momentum appears to be struggling to catch up to both the long and short ends of the MA tails, with the 50-day SMA struggling to lift from the $1,920 level, below both the faster and slower MA lines.
XAU/USD Daily Chart
XAU/USD Technical Levels
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