Gold consolidates weekly losses above $4,000 early Friday, eyes third straight monthly gain.
US Dollar sits at two-month highs on fading December rate cut bets and mixed markets.
Gold’s daily technical setup points to further recovery, but the 21-day appears to be a tough nut to crack.
Gold is consolidating weekly losses in Asian trades on Friday, having stalled Thursday’s turnaround just shy of the $4,050 mark.
Gold buyers seem to catch a breather following the previous upswing before the end-of-the-week and – month profit-taking wave creeps back in.
Markets resorted to taking profits off the table after the recent tremendous correction in Gold in anticipation of a potential US-China trade deal, while taking account of a less dovish US Fed monetary policy decision.The Fed on Wednesday delivered the expected 25 basis points interest rate cut, with Chair Jerome Powell noting that policymakers are likely to become more cautious if it deprives them of further job and inflation reports.
Markets are now pricing in a 72.8% probability of a 25 bps Fed rate cut in December compared with a 91.1% chance a week ago, the CME Group’s FedWatch tool shows.
The Gold rebound was also powered by the latest World Gold Council report that showed, “global gold demand rose 3% year-on-year to 1,313 metric tons, the highest quarterly number on record, in the third quarter as investment demand soared,” per Reuters.
What remains to be seen is if Gold could regain the recovery momentum as the USD stands tall at two-month highs against its major currency rivals.
Additionally, the continued contraction in the Chinese manufacturing sector weighs negatively on Gold. China is the world’s top yellow metal consumer. The official PMI fell to 49.0 in October from 49.8 in September, a six-month low.
That said, the downside in Gold will likely be cushioned by lingering US economic and fiscal concerns as the government shutdown shows no signs of reopening and markets are flying blind amid the data drought.
Daily technical analysis
The daily chart shows that Gold price recaptured the $4,000 barrier on a closing basis on Thursday, reviving the bullish potential.Adding credence to the upside bias, the 14-day RSI stays bullish after breaking above the 50 level.
The important resistance levels to watch now are the $4,050 psychological level and the 21-day SMA at $4,078, followed by $4,129 – the 23.6% Fibo level of the same ascent.
To the downside, the immediate support is seen at the 38.2% Fibo level at $3,973, below which a test of the 50% Fibo of $3,847 will be inevitable
Deeper declines will challenge the 50-day SMA at $3,822.
GOLD aims for 21-day SMA on the road to recovery
Gold is consolidating weekly losses in Asian trades on Friday, having stalled Thursday’s turnaround just shy of the $4,050 mark.
Gold buyers seem to catch a breather following the previous upswing before the end-of-the-week and – month profit-taking wave creeps back in.
Markets resorted to taking profits off the table after the recent tremendous correction in Gold in anticipation of a potential US-China trade deal, while taking account of a less dovish US Fed monetary policy decision.The Fed on Wednesday delivered the expected 25 basis points interest rate cut, with Chair Jerome Powell noting that policymakers are likely to become more cautious if it deprives them of further job and inflation reports.
Markets are now pricing in a 72.8% probability of a 25 bps Fed rate cut in December compared with a 91.1% chance a week ago, the CME Group’s FedWatch tool shows.
The Gold rebound was also powered by the latest World Gold Council report that showed, “global gold demand rose 3% year-on-year to 1,313 metric tons, the highest quarterly number on record, in the third quarter as investment demand soared,” per Reuters.
What remains to be seen is if Gold could regain the recovery momentum as the USD stands tall at two-month highs against its major currency rivals.
Additionally, the continued contraction in the Chinese manufacturing sector weighs negatively on Gold. China is the world’s top yellow metal consumer. The official PMI fell to 49.0 in October from 49.8 in September, a six-month low.
That said, the downside in Gold will likely be cushioned by lingering US economic and fiscal concerns as the government shutdown shows no signs of reopening and markets are flying blind amid the data drought.
Daily technical analysis
The daily chart shows that Gold price recaptured the $4,000 barrier on a closing basis on Thursday, reviving the bullish potential.Adding credence to the upside bias, the 14-day RSI stays bullish after breaking above the 50 level.
The important resistance levels to watch now are the $4,050 psychological level and the 21-day SMA at $4,078, followed by $4,129 – the 23.6% Fibo level of the same ascent.
To the downside, the immediate support is seen at the 38.2% Fibo level at $3,973, below which a test of the 50% Fibo of $3,847 will be inevitable
Deeper declines will challenge the 50-day SMA at $3,822.
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