close
close
migores1

XAU/USD hovers around $2,650, awaiting new cues

XAU/USD Current Price: $2,646.55

  • The Macroeconomic Calendar features the United States Consumer Price Index.
  • Rising tensions in the Middle East undermine market sentiment earlier in the week.
  • XAU/USD is holding at familiar levels, but buyers are far from giving up.

Spot Gold’s consolidation phase continued in the first half of the month following the noisy United States (US) Nonfarm Payrolls (NFP) report released last Friday. XAU/USD found short-term demand earlier in the week as tensions in the Middle East undermined market sentiment. However, the shiny metal turned south at the start of the US session as the US dollar benefited from strong US data supporting the case for a slow pace of interest rate cuts.

The Federal Reserve (Fed) kicked off its monetary easing cycle with a 50 basis point (bps) interest rate cut in September, prompting bets on similar near-term moves. However, stronger-than-expected employment data cooled such concerns. The US dollar has regained its balance and lost its bearish path as investors no longer fear a recession or even a soft landing in the near future.

The macroeconomic calendar had nothing relevant to offer at the start of the week, but it will feature the US Consumer Price Index (CPI) and the minutes of the Federal Open Market Committee (FOMC) meeting. Inflation has cooled enough to push the Fed toward monetary easing, and unless the numbers deliver an unexpected surprise, the US central bank is expected to continue tightening at a slow but steady pace. As for the FOMC minutes, the document will likely have limited impact on financial markets, as all was said and done in the Fed’s September announcement and the accompanying Summary of Economic Projections (SEP).

XAU/USD Short Term Technical Outlook

The daily chart for XAU/USD shows the pair pushing the base of a near-term wedge but holding in the figure. The pair is also developing above all of its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north around $2,616. The 100 and 200 SMAs maintain their bullish slopes, but about $200 below the shorter one. Finally, the Momentum indicator has returned to positive levels, while the Relative Strength Index (RSI) is targeting the downside around 63, correcting overbought conditions and far from sustaining another leg south.

The short-term picture is neutral to bearish, although a slide below the $2,638 region is needed to confirm a continued slide. A mildly bearish 20 SMA provides intraday resistance at around $2,652, while technical indicators are developing into negative levels, though clear directional strength is lacking. On a positive note, the 100 and 200 SMAs are maintaining their upward slope below the current level, suggesting that buyers have stopped but not given up yet.

Support levels: 2,638.10 2,624.50 2,616.00

Resistance levels: 2,652.10 2,663.00 2,673.20

Related Articles

Back to top button