XAU/USD Current price: $2,615.59
- Chinese inflation-related data undermined the market mood at the beginning of the week.
- The United States (US) will release the October Consumer Price Index next Wednesday.
- XAU/USD could keep falling sub-$2,600 despite near-term oversold conditions.
Spot Gold fell throughout the Asian and European sessions as demand for the US Dollar continues following last week's United States (US) events. Former President Donald Trump’s victory in the 2024 election and signs that Republicans will take full control of Congress fueled the USD amid hopes the upcoming government will strengthen the local currency. Even further, the Federal Reserve (Fed) announced a modest 25 basis points (bps) interest rate cut, sticking to its path without showing concerns about the economy’s performance.
Beyond US developments, market players are paying close attention to what’s happening in China. Inflation, as measured by the Consumer Price Index (CPI) resulted negative in October, posting a -0.3% MoM. Furthermore, the annualized Producer Price Index (PPI) declined 2.9% in October, fueling deflation-related concerns.
Data-wise, the macroeconomic calendar had nothing relevant to offer, with investors awaiting the US October CPI, scheduled for release next Wednesday. US inflation, at this point, may be irrelevant, considering investors are looking at whatever the new government will bring to the world’s largest economy.
XAU/USD short-term technical outlook
From a technical point of view, XAU/USD is poised to extend its slump. The bright metal trades near the $2,600 mark and at fresh one-month lows. In the mentioned time frame, Gold develops well below a now flat 20 Simple Moving Average (SMA), while the 100 and 200 SMAs head firmly north far below the current level. Additionally, technical indicators head south almost vertically, well below their midlines, reflecting the strong selling interest.
The near-term technical picture suggests XAU/USD will extend its slide. In the 4-hour chart, a bearish 20 SMA accelerated south after crossing below a flat 200 SMA while providing intraday resistance around the daily high. At the same time, the Momentum indicator heads south almost vertically, while the Relative Strength Index (RSI) indicator maintains its downward slope at around 23 without signs of downward exhaustion.
Support levels: 2,601.90 2,588.70 2,572.45
Resistance levels: 2,627.10 2,639.05 2,651.00
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 recovers from two-year lows, stays below 1.0450
EUR/USD recovers modestly and trades above 1.0400 after setting a two-year low below 1.0350 following the disappointing PMI data from Germany and the Eurozone on Friday. Market focus shifts to November PMI data releases from the US.
GBP/USD falls to six-month lows below 1.2550, eyes on US PMI
GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2550 on Friday. Disappointing PMI data from the UK weigh on Pound Sterling as investors await US PMI data releases.
Gold price refreshes two-week high, looks to build on momentum beyond $2,700 mark
Gold price hits a fresh two-week top during the first half of the European session on Friday, with bulls now looking to build on the momentum further beyond the $2,700 mark. This marks the fifth successive day of a positive move and is fueled by the global flight to safety amid persistent geopolitical tensions stemming from the intensifying Russia-Ukraine war.
S&P Global PMIs set to signal US economy continued to expand in November
The S&P Global preliminary PMIs for November are likely to show little variation from the October final readings. Markets are undecided on whether the Federal Reserve will lower the policy rate again in December.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
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.