Relentless Gold Weakness, As the 20 Daily SMA Keeps XAU Subdued
Gold has been making lower highs since May but the decline picked up pace two weeks ago, as Gold started crashing lower, falling nearly $140 pips off the highs in late September. In the last three days, Gold has been trading in a range that we have been utilizing with several Gold signals, although it did print a new low below Tuesday’s $1,815, as XAU/USD fell to $1,913.50.
GOLD made some gains during the Asian session yesterday, but it gave back the modest intraday gains after bouncing higher to $1,829 and reversed to the lower end of its daily range, around $1,820, before making another leg lower to $,1913 after the positive US unemployment claims and trade balance. XAU received a tiny boost as a result of a minor intraday US Dollar retreat, but there was little follow-through purchasing above $1,830, which seems like a strong resistance zone. Meanwhile, the initial market reaction to Wednesday’s somewhat lackluster US fundamental data was short-lived, owing to a growing acceptance that the Federal Reserve (Fed) will maintain interest rates higher for longer.
On the H4 chart above we see that XAU/USD made a swan dive in late September, while this month it has been trading sideways, as we await the Non-Farm Payrolls report tomorrow. But, the 20 SMA (gray) continues to hold as resistance, rejecting the price during retraces higher.
UBS Bank reduced its gold forecast with the projection for the end of this year at $1,850; the previous forecast was $1950, while the prognosis for June 2024 is $1950. Previously, it was $2100. According to UBS, the landing locations for Gold’s fundamental drivers remain unknown, so downside risks are likely to prevail.
Gold XAU Live Chart
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