GOLD yo-yos within $100 range, volatility set to extend
Gold’s record rally stalls below $4,400; buyers seem to take a breather.
US Dollar licks its wounds amid US-Sino trade tensions, dovish Fed remarks, extended government shutdown.
Gold risks further correction on profit-taking, as the daily RSI remains extremely overbought.
Gold experiences intense volatility in the Asian trading hours on Friday, driven by a bout of profit-taking and risk-off flows, following the latest parabolic rise to new record highs near $4,380.
Gold yo-yos within a $100 range, eyeing a ninth consecutive weekly advance. Gold looks to book a whopping 8% gain this week, mainly driven by massive supply for the US Dollar amid renewed US-China trade tensions and dovish reinforcement surrounding US Fed interest rate cuts.
In a latest spat between the US and China, the latter accused the US of exaggerating its rare earth export controls to stir panic, rejecting calls to roll them back.
Meanwhile, S&P Global estimated that US President Donald Trump’s tariffs will cost global firms $1.2 trillion in 2025, with about two-thirds of the burden falling on consumers.
Additionally, the latest round of Fedspeak helped double down on bets for two Fed rate cuts this year and weighed on the US Treasury bond yields, as investors remain wary of the impact of the tariffs and the ongoing government shutdown on the US economy.
Fed Governor Christopher Waller said on Thursday that a 25 bps rate cut is justified at the upcoming meeting, based on current data.
However, the correction in Gold seems to be sponsored by fresh optimism on a potential Russia-Ukraine peace deal as Trump and Ukrainian President Volodymyr Zelenskyy in Washington on Friday.
Further, markets resorted to taking profits off the table heading into the weekend, with the end-of-the-week flows likely in play going forward. All in all, another volatile session remains on the cards.
Daily technical analysis
The short-term technical outlook for Gold remains more or less the same, with the ‘hot run’ triggering timely bouts of profit-taking, justified by the 14-day RSI stretching within the extreme overbought zone, currently near 87.50.
Risks are skewed more in favor of an extension to the latest steep corrective downside, with the immediate cushion seen at the rising channel resistance-turned-support at $4,243.If that cap gives way, sellers could flex their muscle toward the actual channel support at $4,095.
The natural tendency of the rising channel formation is a break to the downside and hence, a daily candlestick close below the latter could confirm a bearish breakdown, initiating a fresh correction toward the $3,950-$3,900 demand area, where the 21-day SMA and the October 1 and 2 highs lie.
On the flip side, a retest of the lifetime highs at $4,379 will be inevitable if buyers fight back control. The $4,450 psychological level and the $4,500 round figure will be next on their radars.
GOLD yo-yos within $100 range, volatility set to extend
Gold experiences intense volatility in the Asian trading hours on Friday, driven by a bout of profit-taking and risk-off flows, following the latest parabolic rise to new record highs near $4,380.
Gold yo-yos within a $100 range, eyeing a ninth consecutive weekly advance. Gold looks to book a whopping 8% gain this week, mainly driven by massive supply for the US Dollar amid renewed US-China trade tensions and dovish reinforcement surrounding US Fed interest rate cuts.
In a latest spat between the US and China, the latter accused the US of exaggerating its rare earth export controls to stir panic, rejecting calls to roll them back.
Meanwhile, S&P Global estimated that US President Donald Trump’s tariffs will cost global firms $1.2 trillion in 2025, with about two-thirds of the burden falling on consumers.
Additionally, the latest round of Fedspeak helped double down on bets for two Fed rate cuts this year and weighed on the US Treasury bond yields, as investors remain wary of the impact of the tariffs and the ongoing government shutdown on the US economy.
Fed Governor Christopher Waller said on Thursday that a 25 bps rate cut is justified at the upcoming meeting, based on current data.
However, the correction in Gold seems to be sponsored by fresh optimism on a potential Russia-Ukraine peace deal as Trump and Ukrainian President Volodymyr Zelenskyy in Washington on Friday.
Further, markets resorted to taking profits off the table heading into the weekend, with the end-of-the-week flows likely in play going forward. All in all, another volatile session remains on the cards.
Daily technical analysis
The short-term technical outlook for Gold remains more or less the same, with the ‘hot run’ triggering timely bouts of profit-taking, justified by the 14-day RSI stretching within the extreme overbought zone, currently near 87.50.
Risks are skewed more in favor of an extension to the latest steep corrective downside, with the immediate cushion seen at the rising channel resistance-turned-support at $4,243.If that cap gives way, sellers could flex their muscle toward the actual channel support at $4,095.
The natural tendency of the rising channel formation is a break to the downside and hence, a daily candlestick close below the latter could confirm a bearish breakdown, initiating a fresh correction toward the $3,950-$3,900 demand area, where the 21-day SMA and the October 1 and 2 highs lie.
On the flip side, a retest of the lifetime highs at $4,379 will be inevitable if buyers fight back control. The $4,450 psychological level and the $4,500 round figure will be next on their radars.
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