- Gold price has slipped to near $1,740 as the DXY has recovered a majority of Tuesday’s losses.
- The US private sector has contracted sharply led by higher velocity in hiking interest rates by the Fed.
- The US Durable Goods Orders data is seen lower at 0.6% than the former release of 2%.
Gold price (XAU/USD) is going through a corrective mode after failing to sustain above the critical hurdle of $1,750.00. The precious metal has witnessed a short-live correction as the US dollar index (DXY) has managed to recover more than half of its entire losses recorded on Tuesday after the release of the downbeat US Purchasing Managers Index (PMI). The DXY has climbed to near 108.80 after printing a low of 108.36.
The downbeat US PMI is the consequence of the adaptation of a higher pace in hiking interest rates by the Federal Reserve (Fed). Activities of the private sector are contracting dramatically led by the unavailability of cheap money for investment in multiple projects. Lack of liquidity due to higher interest rates has forced them to go with ultra-filtered investments only. Also, the corporate sector is not operating at full production capacities amid expectations of a decline in the overall demand ahead.
In today’s session, the US Durable Goods Orders will hog the limelight. According to the market consensus, the economic data is likely to land at 0.6%, lower than the prior release of 2%. As price pressures are higher in the US economy and the value of paychecks for households is trimming sharply, investors have surrendered the demand for durable goods for a while.
Gold technical analysis
Gold prices are attempting to sustain above the 50% Fibonacci retracement (placed from July 21 low at $1,680.91 to August 10 high at $1,807.93) at $1,744.42. The precious metal is dealing with the 20-period Exponential Moving Average (EMA) at $1,746.64 for now. However, the 50-EMA at $1,757.70 is still declining.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the neutral range of 40.00-60.00 from the bearish range of 20.00-40.00. But that doesn’t warrant that the impact of bears has faded.
Gold four-hour chart
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
AUD/USD appreciates as US Dollar remains subdued after a softer inflation report
The Australian Dollar steadies following two days of gains on Monday as the US Dollar remains subdued following the Personal Consumption Expenditures Price Index data from the United States released on Friday.
USD/JPY consolidates around 156.50 area; bullish bias remains
USD/JPY holds steady around the mid-156.00s at the start of a new week and for now, seems to have stalled a modest pullback from the 158.00 neighborhood, or over a five-month top touched on Friday. Doubts over when the BoJ could hike rates again and a positive risk tone undermine the safe-haven JPY.
Gold downside bias remains intact while below $2,645
Gold price is looking to extend its recovery from monthly lows into a third day on Monday as buyers hold their grip above the $2,600 mark. However, the further upside appears elusive amid a broad US Dollar bounce and a pause in the decline of US Treasury bond yields.
Week ahead: No festive cheer for the markets after hawkish Fed
US and Japanese data in focus as markets wind down for Christmas. Gold and stocks bruised by Fed, but can the US dollar extend its gains? Risk of volatility amid thin trading and Treasury auctions.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.