XAUUSD Current price: $1,661.04
- Wall Street shrugged off the negative stance while US government bond yields retreated.
- The dollar’s extreme overbought conditions finally turned into a corrective movement.
- XAUUSD needs to extend its rally beyond $1,688 to sustain the advance.
XAUUSD bounced from a fresh two-year low of $1,614.81 a troy ounce as dip buyers appeared on the dollar’s extreme overbought conditions. The bright metal peaked at $1,661.57, its highest for the week, holding above the $1,650 mid-US afternoon.
The dollar strengthened throughout the first half of the day on the back of comments from US authorities, pointing out US economic strength. Nevertheless, the greenback changed course with Wall Street’s opening, without a particular catalyst. True, government bond yields have retreated sharply, with the 2-year Treasury note currently yielding 4.13% and the 10-year note, 3.76%, down roughly 20 points.
At the same time, Wall Street shrugged off its negative tone, with major indexes trading in the green. The main focus remains on central banks and whatever policymakers may or may not do to tame inflation without smashing economic progress. Generally speaking, the US seems to be in much better shape than its major counterparts, and the market is playing that game today. Still, the future seems gloomy, as the path towards steady growth is long and bumpy.
Gold price short-term technical outlook
The daily chart for the XAUUSD pair shows that technical indicators have finally left the extreme oversold territory, maintaining their upward slopes but well below their midlines, leaving the current advance as a corrective movement. The 20 SMA keeps heading south below the longer ones, providing dynamic resistance at around $1,683. Gold topped at $1,688 in the previous week, the level to beat for the current rally to become more sustainable.
Gold is losing bullish strength in the near term, according to the 4-hour chart. Technical indicators have turned flat but hold within positive levels, while the 20 SMA has lost its bearish momentum and now consolidates at around $1,635. The longer moving averages, in the meantime, maintain their firmly bearish slopes far above the current level.
Support levels: 1,649.75 1,634.60 1,621.05
Resistance levels: 1,661.70 1,678.50 1,688.00
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
Editors’ Picks
EUR/USD drops below 1.0500 amid French political jitters
EUR/USD is back in the red below 1.0500 in the European session on Wednesday. The pair trades with caution amid renewed US Dollar buying and French political uncertainty as the government faces a no-confidence vote in a busy day ahead. US data, Lagarde and Powell eyed.
GBP/USD clings to gains below 1.2700 ahead of Bailey's speech
GBP/USD is consolidating gains below 1.2700 in early European trading on Wednesday. Traders refrain from placing fresh bets ahead of speeches from BoE Governor Bailey and Fed Chair Powell later in the day. US ADP Jobs and ISM Services PMI data are also awaited.
Gold price slides below $2,640, fresh daily low ahead of Fed Chair Powell's speech
Gold price attracts some sellers following an intraday uptick to the $2,650 supply zone and hits a fresh daily low during the first half of the European session on Wednesday. The precious metal, however, remains confined in a familiar range held over the past week or so as traders seem reluctant to place aggressive directional bets ahead of Fed Chair Jerome Powell's speech.
ADP report expected to show US private sector job growth cooled in November
The ADP Employment Change report is seen showing a deceleration of job creation in the US private sector in November. The ADP report could anticipate the more relevant Nonfarm Payrolls report on Friday.
The fall of Barnier’s government would be bad news for the French economy
This French political stand-off is just one more negative for the euro. With the eurozone economy facing the threat of tariffs in 2025 and the region lacking any prospect of cohesive fiscal support, the potential fall of the French government merely adds to views that the ECB will have to do the heavy lifting in 2025.
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.