XAU/USD Current price: $2,292.40
- Federal Reserve’s speakers keep cooling hopes for multiple rate cuts this year.
- Investors are now waiting for the United States March Nonfarm Payrolls report.
- XAU/USD could extend its near-term decline, but bulls still hold the grip.
Spot Gold kept rallying on Tuesday, peaking at the beginning of the day at $2,304.81 a troy ounce, a fresh record high. The bright metal benefited from the broad US Dollar’s weakness as Federal Reserve (Fed) officials aligned beyond Chairman Jerome Powell and worked on cooling hopes for soon-to-come rate cuts. Despite the central bank having maintained three potential cuts in the dot plot, market players are now hoping for two in the best-case scenario.
Fed Chair Powell made it clear that policymakers are in no rush to cut rates, particularly considering the economic strength, inflation still above target, and the tight labor market. Speaking of which, the United States (US) is heading into publishing the March Nonfarm Payrolls report on Friday. The country is expected to have added 200K new job positions in the month, while the Unemployment Rate is foreseen unchanged at 3.9%. A better-than-anticipated outcome will help the USD recover ground ahead of the weekly close, although softer-than-expected figures could push XAU/USD beyond the mentioned record high.
XAU/USD short-term technical outlook
The daily chart for XAU/USD shows it finally gave up some ground after rallying for seven straight days. The case for a bearish correction gains strength as technical indicators started retreating from extreme overbought levels. An interim top can not be confirmed yet. The pair is still developing well above bullish moving averages while consolidating near its recent highs. XAU/USD may well resume its advance after giving up some ground.
The 4-hour chart also supports the case of an upcoming bearish correction. The pair shed some ground, leading to technical indicators leaving overbought territory. The Momentum indicator heads firmly south, approaching its 100 line from above, although the Relative Strength Index (RSI) indicator turned flat at 65, the latter suggesting limited selling interest. Furthermore, XAU/USD keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) losing its bullish strength but still heading north far above the longer ones.
Support levels: 2,277.60 2,261.30 2,250.70
Resistance levels: 2,295.10 2,310.00 2,325.00
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 treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.