- Gold price struggles to reverse the previous day’s pullback from YTD top.
- Mixed headlines about banking crisis, cautious mood ahead of key central bank events probe XAU/USD traders.
- Rebound in yields, hawkish Fed bets probe Gold buyers ahead of FOMC.
- XAU/USD bears need validation from $1,960 support confluence, Fed’s hawkish bias.
Gold price (XAU/USD) regains upside momentum, following the pullback from a Year-To-Date (YTD) high, amid cautious optimism surrounding the banking sector. Adding strength to the recovery moves could be the market’s inaction amid the Japanese holiday, as well as the failures on the part of the US Treasury bond yields to extend the recent corrective bounce off a six-month low.
Headlines suggesting the US policymakers’ search for ways to insure all banking deposits join the UBS-Credit Suisse deal and major central banks’ rush to keep the markets liquid with the US Dollar flow seem to favor the Gold buyers.
It’s worth noting, however, that the latest read of the CME’s FedWatch tool mentions the probability of witnessing a 0.25% Fed rate hike on Wednesday as near to 75%, up from the last week’s 65%, which in turn allows the US Treasury bond yields to rebound. That said, Treasury bond yields remain inactive as Japan’s holidays limited bond trading in Asia. It’s worth noting that the US 10-year and two-year Treasury bond yields bounced off the lowest levels since September 2022 the previous day.
Moving on, Fed’s reaction to the banking crisis will be crucial for Gold traders to watch as the 0.25% rate hike is already given. Should the dot-plot tease policy pivot, the US Dollar can have a further downside to trace, which in turn can propel the XAU/USD price.
Also read: Gold Price Forecast: XAU/USD grinds beyond $1,940 support, banking crisis, Federal Reserve in focus
Gold Price: Key levels to watch
As per Technical Confluence Detector, Gold price trades successfully beyond the $1,960 support confluence, despite the latest inaction, which in turn keeps the XAU/USD buyers hopeful. That said, the stated key support comprises Fibonacci 23.6% on one-week, previous monthly high and Pivot Point one-day S1.
That said, Fibonacci 23.6% on one-day and 50-HMA levels restrict immediate downside of the Gold price near $1,976 and $1,965-66 in that order. It's worth mentioning that the $1,940 acts as the key downside support, apart from the $1,960, which could challenge the XAU/USD bears.
Meanwhile, the previous weekly high surrounding $1,990 can act as an immediate resistance before highlighting the $2,000 threshold.
In a case where the Gold price remains firmer past $2,000, Pivot Point one-day R1 can act as a validation point for the further run-up near $2,005 before fueling the XAU/USD towards 2022’s peak of $2,070.
Here is how it looks on the tool
About Technical Confluences Detector
The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
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
GBP/USD holds recovery gains above 1.2900 ahead of BoE policy decision
GBP/USD builds its recovery momentum above 1.2900 in European trading on Thursday, moving away from its lowest level since mid-August. Traders adjust their positions ahead of the key BoE and Fed monetary policy announcements.
EUR/USD stays firm near 1.0750 amid US Dollar pullback
EUR/USD holds higher ground near 1.0750 in the European session on Thursday. The pair finds support from a broad US Dollar retreat, as traders unwind their Trunp win-inspired USD longs ahead of all-important Fed policy announcements.
Gold price faces challenges due to decline in safe-haven flows, awaits Fed rate decision
Gold price (XAU/USD) faced challenges as the dollar-denominated precious metals struggled due to a stronger US Dollar (USD) following the victory of former President Donald Trump in the US election.
BoE set for a second interest rate cut this year on Thursday
Market consensus points to further easing by the Bank of England's (BoE) upcoming interest rate decision on Thursday. The BoE has held rates steady at 5.00% in the previous gathering, but shifting investor sentiment now suggests a possible 25-basis-point cut this week.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 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.