Gold Price Forecast: XAU/USD needs to hold above $1720 to avoid further falls
Gold (XAU/USD) has staged a modest recovery from fresh seven-week lows. Defending $1720 is critical for XAU/USD bulls, as focus shifts to US data, FXStreet’s Dhwani Mehta informs.
See – Gold Price Forecast: XAU/USD to drop to the August low of $1692 on a break below $1722 – Commerzbank
Focus will remain on yields and dollar amid hawkish Fed’s stance
“Upbeat Chinese Caixin Manufacturing PMI, an aversion to the US government shutdown and a rebound in metals and energy prices seem to have revived the risk-on trades. However, the further upside in gold price remains elusive, as the Fed’s hawkish expectations will continue leading the sentiment, underpinning the yields and the dollar while weighing negatively on the non-interest-bearing gold.”
“Also of note remains the US final GDP release and weekly jobless claims for fresh dollar trades. A slew of speeches from the Fed officials will be closely eyed as well.”
“Only a four-hourly candlestick closing above the 21-SMA at $1742 hurdle will create conditions for any meaningful recovery. Up next, gold buyers will look to regain the 50-SMA at $1753, opening doors for a fresh rally towards the 100-SMA at $1770.”
“If the sellers fight back control, then a retest of the seven-week troughs at $1722 would be inevitable. Gold bears will need to find a strong foothold below $1720, in order to flex their muscles towards the August 10 low of $1718. The line in the sand for gold optimists is the $1700 psychological threshold.”
“To conclude, any recovery in gold could likely remain short-lived, as sellers would seek fresh entries at higher levels.”
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FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
