Gold rises toward $1520, hits three-week highs
|- XAU/SUD gains for the fourth day in-a-row, up $20 over the week.
- After finding support above $1480, now could test critical resistance around $1520.
Gold continues to rise, extending weekly gains on Friday. Price peaked after the beginning of the American session at $1,517.99/oz, the highest since October 3. The bullish momentum alleviated after approaching the $1,520 area and pulled back. As of writing trades at $1,512.
The demand for the yellow metal remains elevated ahead of next week’s Federal Reserve meeting. The US central bank is expected to cut rates by 25bp. US yields are modestly higher today but not capping the upside in Gold. “A 25bp rate cut is currently priced in with more than 90% probability. Given that we expect the easing bias to be maintained, but without a pre-commitment to further reductions, the impact on the US treasury market should be limited”, said analysts at Danske Bank.
Technicals offer a boost to XAU/USD
On Thursday Gold rose above $1,495 breaking the upper limited of a trading range from two weeks ago and clear the way to more gains. It also climbed above the 20-day moving average reinforcing the bullish technical outlook.
Yesterday it closed clearly above $1500 and today rose further. Now the $1,515/20 is the critical resistance. A close on top could target $1,535. But if XAU/USD fails to rise above $1,520 the bullish tone would ease. Now $1,495 it the key short-term support, followed by the lower bottom of the mentioned range at $1,480.
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