Buyers’ exhaustion could set in as GOLD tops $4,000 for first time
Gold’s record rally remains unstoppable as buyers conquer the key $4,000 level.
Heightened global uncertainty fuels safe-haven flows into the US Dollar and Gold.
Gold is extremely overbought on the daily chart, risks a profit-taking pullback before the next leg north.
Gold captures the key $4,000 barrier for the first time in history early Wednesday as the explosive record run remains uninterrupted.
Markets are witnessing a ‘buy everything’ trading scenario amid US FED easing hopes, despite heightened global economic and political uncertainties. The clear winner appears to be Gold, which is up roughly 50% so far this year.
The latest leg north in Gold is driven by intensifying concerns over the mass layoff of Federal employees likely to be announced by US President Donald Trump any time soon as the government shutdown extends into a second week.
Looming mass layoffs and delayed key US economic data releases only boost the chances of the US Fed opting for two interest rate cuts this year, with markets pricing in a 95% probability of such a move at the October 28-29 monetary policy meeting.
The shutdown-induced increased demand for safe havens keeps underpinning the sentiment around the US Dollar and Gold, especially in times of the ongoing political upheaval in France and Japan.
Additionally, sustained Gold buying by global central banks adds to the bullish pressures around the yellow metal.
Looking ahead, speeches from Fed officials remain in focus for fresh insights on the US economy and the Fed’s path forward on interest rates, in the absence of any official data publication.
That said, Gold remains at risk of a steep pullback from a short-term technical perspective.
Daily technical analysis
The daily chart shows that the 14-day RSI is stretching further in the extreme overbought zone, currently near 86.50.
The leading indicator suggests that a deep correction appears in the offing if buyers fail to sustain the break above $4,000 on a daily candlestick closing basis.
If that materializes, doors will open up for a test of the $4,050 psychological level, with the next target seen at $4,100.
On the flip side, if buyers finally give up, Gold could test the initial psychological support at $3,950, below which this week’s low of $3,884 will be challenged.
The line in the sand for Gold buyers will likely be the October 2 low of $3,820.
Buyers’ exhaustion could set in as GOLD tops $4,000 for first time
Gold captures the key $4,000 barrier for the first time in history early Wednesday as the explosive record run remains uninterrupted.
Markets are witnessing a ‘buy everything’ trading scenario amid US FED easing hopes, despite heightened global economic and political uncertainties. The clear winner appears to be Gold, which is up roughly 50% so far this year.
The latest leg north in Gold is driven by intensifying concerns over the mass layoff of Federal employees likely to be announced by US President Donald Trump any time soon as the government shutdown extends into a second week.
Looming mass layoffs and delayed key US economic data releases only boost the chances of the US Fed opting for two interest rate cuts this year, with markets pricing in a 95% probability of such a move at the October 28-29 monetary policy meeting.
The shutdown-induced increased demand for safe havens keeps underpinning the sentiment around the US Dollar and Gold, especially in times of the ongoing political upheaval in France and Japan.
Additionally, sustained Gold buying by global central banks adds to the bullish pressures around the yellow metal.
Looking ahead, speeches from Fed officials remain in focus for fresh insights on the US economy and the Fed’s path forward on interest rates, in the absence of any official data publication.
That said, Gold remains at risk of a steep pullback from a short-term technical perspective.
Daily technical analysis
The daily chart shows that the 14-day RSI is stretching further in the extreme overbought zone, currently near 86.50.
The leading indicator suggests that a deep correction appears in the offing if buyers fail to sustain the break above $4,000 on a daily candlestick closing basis.
If that materializes, doors will open up for a test of the $4,050 psychological level, with the next target seen at $4,100.
On the flip side, if buyers finally give up, Gold could test the initial psychological support at $3,950, below which this week’s low of $3,884 will be challenged.
The line in the sand for Gold buyers will likely be the October 2 low of $3,820.
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