- Gold price takes a breather after the recent rally, as focus shifts to Fed minutes.
- Investors reassess Fed’s hawkish moves after Friday’s US NFP beat.
- The four-hourly chart shows that gold price could retest the $1800 mark.
Gold price closed in the green for the second straight week on Friday, as the bulls received a fresh boost from the above-forecasts US Nonfarm Payrolls (NFP) headline numbers, which triggered a sharp profit-taking slide in the dollar from near two-month peaks. Markets took the upbeat US jobs data as an excuse to take profits off the table on ‘sell the fact’ trading, as they expected stronger NFP figures to stoke up the Fed’s tapering expectations. The NFP came in at 850K in June vs. 700K expected and 559K previous. Meanwhile, the record run on Wall Street also failed to deter the gold bulls, as the price recaptured the critical 100-Daily Moving Average (DMA) at $1790 to reach fresh two-week highs at $1795. Gold price, however, failed to deliver a closing above that key hurdle.
That said, gold price is struggling below the 100-DMA barrier this Monday, partly lagged by the broad-based US dollar rebound, as investors reassess the odds for the Fed’s hawkish hand ahead of this week’s FOMC minutes. Further, risk-aversion sweeps off the Asian markets after China’s Caixin Services PMI fell to a 14-month low at 50.3, lifting the haven demand for the greenback while capping gold’s upside. In the day ahead, the dollar’s dynamics and broader market sentiment will influence gold price action, as traders brace for the US ISM Services PMI for fresh near-term trading opportunities.
Gold Price Chart - Technical outlook
Gold: Four-hour chart
As observed on the four-hour chart, gold price is flat-lined below a horizontal (orange) trendline resistance at $1795. Just above that level, a downward sloping 100-Simple Moving Average (SMA) at $1798 appears.
Therefore, gold bulls need a decisive break above the said resistance zone, in order to extend its recent upbeat momentum to challenge $1800.
Acceptance above the $1800 round figure will expose the next resistance at $1812, June 17 high.
The Relative Strength Index (RSI) is edging higher above the midline, suggesting that there is room to rise in the near term.
Adding credence to a potential move higher, gold price is on the verge of confirming a bull cross, with the 21-SMA looking to cut the horizontal 50-SMA from below.
Alternatively, immediate support is seen at the 21 and 50-SMAs confluence, now at $1776. Sellers will then target the static support at $1770.
Further down, bears could challenge the two-month lows of $1751 reached last week.
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.