XAU/USD Current price:  $1,750.00

  • Gold fell amid a better market mood sending investors into high-yielding assets.
  • Central banks have confirmed they are in the tapering path, despite uncertainty persists.
  • XAU/USD is technically bearish and could test March low at 1,676.73.

Gold is sharply down for a second consecutive day, trading in the 1,750 price zone. Risk appetite took over financial markets on Thursday, following news that the Chinese Evergrande company will likely be split into three separate entities to prevent its default and financial disruption in the country. The greenback edged lower across the board but also did the safe-haven metal.

Most European indexes closed in the green, while Wall Street posted substantial gains, turning green for the week. Meanwhile, the yield on the 10-year US Treasury note jumped to 1.41%, its highest level since last July, a sign of the risk-on mood.

On Wednesday, the US Federal Reserve noted that economic progress in the US gives the central bank the chance to retrieve part of its massive financial support. “If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the statement read. On Thursday, the Bank of England had a monetary policy and pointed out better economic conditions opening the door for a tighter monetary policy.

Gold price short-term technical outlook

XAU/USD trades near its September low at $1,742.00 a troy ounce, the immediate support level. It is also below the 61.8% retracement of its March/June rally at 1,769.10, a critical resistance level. Should the pair break below the mentioned monthly low, it has room to test the lower end of the range at  1,676.73.

The daily chart shows that gold is well below all of its moving averages, with the 20 SMA accelerating south below the longer ones. Moreover, technical indicators have accelerated their declines within negative levels, maintaining their strong bearish momentum.

In the near term, and according to the 4-hour chart, the risk is also skewed to the downside. The 20 SMA converges with a Fibonacci resistance turning lower below the longer ones, while technical indicators remain near their daily lows well into negative territory.

Support levels: 1,742.00 1,734.30 1,725.10

Resistance levels: 1,769.10 1,785.40 1,796.90  

View Live Chart for the XAU/USD

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades sideways below 1.0450 amid quiet markets

EUR/USD trades sideways below 1.0450 amid quiet markets

EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familair range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro. 

EUR/USD News
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision

GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision

GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick. 

GBP/USD News
Gold price sticks to modest gains; upside seems limited amid USD dip-buying

Gold price sticks to modest gains; upside seems limited amid USD dip-buying

Gold price attracts some follow-through buying at the start of a new week and looks to build on its recovery from a one-month low touched last Thursday. Geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, turn out to be key factors benefiting the safe-haven precious metal. 

Gold News
Let’s focus on the good for a few more days

Let’s focus on the good for a few more days

Last week was chaotic. The Fed’s hawkish 25bp cut, the hint from the dot plot that there would be only two rate cuts next year instead of four – because the US economy is too strong to continue the cuts as previously predicted - and the US debt limit shenanigans even before Trump took office gave a negative jolt to the US stock markets.

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Majors

Cryptocurrencies

Signatures