XAU/USD Current price: $2,691.29
- The European Central Bank trimmed interest rates by 25 basis points each.
- The US reported upbeat employment-related figures, Retail Sales.
- XAU/USD keeps reaching higher highs, bulls are not yet done.
Gold price reached a fresh all-time high on Thursday, trading as high as $2,969.63 a troy ounce during American trading hours. Gold buyers gained confidence early in Asia as the poor performance of local shares fueled demand for safety. Demand for the bright metal was also backed by concerns about the United States (US) future government. Three weeks ahead of the election, polls show a tight vote intention between the two candidates, generating uncertainty.
XAU/USD suffered a minor intraday setback after the European Central Bank (ECB) announced its decision on monetary policy. The ECB trimmed the three main benchmarks by 25 basis points (bps) each as widely anticipated. In the following press conference, President Christine Lagarde delivered a pretty dovish message, putting pressure on the Euro and pushing the Greenback temporarily up.
The US Dollar further advanced after local data beat expectations. September Retail Sales rose by 0.4% in the month, while the Philadelphia Fed Manufacturing Survey jumped to 10.3 in October from 1.7 in September. Finally, Initial Jobless Claims for the week ended October 11 rose by 241K, below the 260K anticipated. As a result, Wall Street surged, while Treasury bonds fell amid expectations the Federal Reserve (Fed) would be able to doge an economic setback.
XAU/USD short-term technical outlook
From a technical point of view, the daily chart for XAU/USD suggests the bullish run is far from over. The pair keeps slowly but steadily grinding north, while a bullish 20 Simple Moving Average (SMA) leads the way north by providing support at around $2,649.50. At the same time, the 100 and 200 SMAs advance far below the shorter one, reflecting persistent buying interest. Finally, technical indicators gain upward strength within positive levels, in line with another leg north.
In the near term, and according to the 4-hour chart, the risk also skews to the upside. A bullish 20 SMA extends its upward slope above the 100 SMA, while the 200 SMA grinds north far below the shorter ones. Technical indicators, in the meantime, hold well above their midlines, although without clear directional strength. The $2,700 mark is at reach in the upcoming sessions, with a corrective decline afterwards possible. Still, there are no signs buyers are giving up; instead, they would likely take their chances on dips.
Support levels: 2,685.45 2,668.80 2,655.65
Resistance levels: 2,700.00 2,715.00, 2,740.00
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