Gold Price Forecast: XAU/USD consolidates losses near the $1,800 mark

XAU/USD Current price: $1,821.36

• US Treasury yields extended their bullish route to peak at fresh multi-year highs.
• The US ADP survey showed the private sector added 89,000 new jobs in September.
• XAU/USD consolidates around $1,820 with bears on pause but still leading.

Gold prices traded uneventfully on Wednesday, currently hovering around the $1,820 mark. The bright metal found near-term demand ahead of Wall Street’s opening but quickly trimmed intraday gains as investors moved into high-yielding assets.

 Financial markets looked at government bond yields and United States (US) data for direction, getting little clues from them. Earlier in the day, the yield on the 10-year Treasury note extended its bullish route and peaked at 4.88%, its highest since 2007, later easing towards the 4.73% area, where it stands at the time being. The 2-year note, in the meantime, offers 5.05%, down 9 basis points (bps) on the day.

Mid-American afternoon, the US Dollar trades near its daily lows as the market mood improved modestly following mixed US macroeconomic figures. The ADP survey showed the private sector added just 89K new jobs in September, much worse than anticipated, yet a sign of a loosening labor market. Also, Factory Orders were up 1.2% in August, beating expectations, while the ISM Services PMI printed at 53.6, matching the market’s forecast in September.

XAU/USD short-term technical outlook

XAU/USD daily chart shows it keeps posting lower highs and lower lows, in line with the dominant bearish trend. The bright metal remains far below all its moving averages, with the 20 Simple Moving Average (SMA) heading south almost vertically. Technical indicators, in the meantime, have partially lost their bearish strength but remain at record lows within extreme oversold levels.

In the near term, and according to the 4-hour chart,  the risk remains skewed to the downside, with some technical divergences suggesting a potential corrective advance. A firmly bearish 20 SMA caps advances, providing dynamic resistance at around $1,831.60, while the longer moving averages head firmly south well above, the shorter one. The Momentum indicator recovered from extreme reading and aims north just below its midline, while the Relative Strength Index (RSI) indicator consolidates around 23.

Support levels: 1,815.20 1,804.70 1,792.10

Resistance levels: 1,831.60 1,845.20 1,858.30  

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