XAU/USD Current price: $1,855.44
- US Treasury yields reached fresh weekly highs as concerns persist.
- Upbeat US Retail Sales and Industrial Production figures boosted the greenback.
- Gold reached a fresh multi-month high before returning to its comfort zone around 1,850.
Gold reached a fresh multi-month high of $1,877.15 a troy ounce, a level that was last seen in June this year, trimming intraday gains and returning to the 1,850 price zone ahead of Wall Street’s opening. Upbeat US data gave a boost to the greenback, also underpinned by persistently strong US government bond yields. The yield on the 10-year US Treasury note reached a new weekly peak of 1.635% amid continued inflation-related concerns.
The US published October Retail Sales, up in the month 1.7%, better than the 1.4% expected, while Industrial Production in the same month improved by 1.6%, more than doubling the market’s expectations. Finally, Capacity Utilization was up to 76.4% vs the 75.9% expected. Meanwhile, stocks present a better tone, with US indexes posting solid intraday gains after a mixed close from their overseas counterparts.
Gold price short-term technical outlook
XAU/USD trades in the red, down for a second consecutive day. The bright metal has an immediate support level at 1,848.90, the 23.6% retracement of its November rally. From a technical point of view, the daily chart suggests that gold is in a corrective decline, as technical indicators are barely retreating from overbought territory, while the metal keeps developing well above all of its moving averages.
The 4-hour chart shows that the bearish potential remains limited, as technical indicators hold above their midlines, with the Momentum already bouncing from around its 100 level. At the same time, the price has pierced its 20-SMA, now directionless, while the longer moving averages maintain their firmly bullish slopes far below the current level. The 38.2% retracement of the mentioned rally and some intraday highs makes the 1,830 price zone a relevant support and an attractive level for bulls if it’s reached.
Support levels: 1,848.90 1,837.50 1,830.00
Resistance levels: 1,870.10 1,883.00 1,895.20
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