Gold Passes the First Bullish Test
Skerdian Meta • 1 min read
Gold made quite a reversal early this month when it was trading below $1,615, which is now a decent support zone. XAU/USD bounced from there and since then Gold hasn’t looked back. The sentiment improved after US consumer inflation CPI came out softer than expected, falling below 8%, releasing the FED from the pressure to keep raising rates at the current pace.
Although, GOLD reached the 200 SMA (purple) on the daily chart which rejected the price and XAU started retreating lower by the middle of last week, before the rest of the other assets. The US retail sales report which came in stronger than expected for October sent the USD higher and risk assets retreating lower.
Gold Daily Chart – The 100 SMA Holds As Support
Gold turns bullish again
So, that put the bullish reversal in question and Gold fell to $1,728 from $1,787. Although, on Tuesday we saw an attempt at reversing Gold higher, as buyers came back in. The sentiment improved despite further coronavirus restrictions and lockdowns in China, while yesterday we saw some decent bullish momentum as the USD retreated while risk assets increased.
US manufacturing PMI indicator fell into contraction this month while services that were already there fell even deeper. That lowered the odds of the FED raising rates t the current pace (75 bps) and the FOMC minutes from the last FED meeting also looked less hawkish, as they indicated a slower pace of rate hikes. The USD turned bearish while risk assets and Gold jumped higher and have been climbing in the last few trading sessions. So, moving averages are turning into support which suggests that buyers are in control and the bullish trend is back on.