Gold continued to hover around the $4,150 mark in early trading on Wednesday, maintaining its previous upward momentum as the market anticipated a possible end to the government shutdown.
After three consecutive days of gains, gold buyers took a breather. Previously, renewed optimism about the reopening of the US government had fueled a wave of buying across the market.Continued risk-averse flows continued to weaken the dollar’s appeal as a safe-haven currency, while calls for significant interest rate cuts by the Federal Reserve in the coming months further dampened demand for the dollar.
During the record-breaking government shutdown, market focus remained on economic data released by the US private sector. Tuesday’s ADP employment data highlighted concerns about a weak labor market and rekindled hopes for further easing by the Federal Reserve.
The latest ADP data showed that as of the end of October, US businesses were losing more than 11,000 jobs per week, prompting the market to raise its estimate of the probability of a Fed rate cut in December from 62% before the data release to approximately 68%.
The weak US jobs report boosted market expectations of a dovish stance from the Federal Reserve, while falling US Treasury yields cushioned downward pressure on gold. However, the dollar’s modest rebound limited gold’s three-day rally.
Looking ahead, with the market awaiting the release of US economic data, a temporary pullback in gold prices is unlikely. This data could further reveal the Federal Reserve’s future interest rate direction.
Furthermore, market focus will remain on the Republican-controlled House of Representatives’ vote later Wednesday on a compromise plan aimed at restoring government funding and ending the government shutdown that began on October 1.
Daily technical analysis
As observed on the daily chart, the 14-day RSI is turning slightly lower, currently near 59, but remains well above the midline.The leading indicator, thus, suggests that any downtick in Gold could be short-lived.
That being said, Gold closed Tuesday above $4,129, the 23.6% Fibonacci Retracement level of the parabolic rise to the record high that began on August 19.
However, buyers need to crack the $4,150 hurdle on a sustained basis to initiate a fresh uptrend toward the record high of $4,382.Ahead of that, the $4,200 round level will be put to test.
Conversely, the initial support is located at the 21-day SMA at $4,085, below which the $4,050 psychological level will be challenged.
The line in the sand for Gold buyers is seen at $3,973, the 38.2% Fibo level of the same advance.
GOLD closes above key 23.6% Fibo barrier, what’s next?
Gold continued to hover around the $4,150 mark in early trading on Wednesday, maintaining its previous upward momentum as the market anticipated a possible end to the government shutdown.
After three consecutive days of gains, gold buyers took a breather. Previously, renewed optimism about the reopening of the US government had fueled a wave of buying across the market.Continued risk-averse flows continued to weaken the dollar’s appeal as a safe-haven currency, while calls for significant interest rate cuts by the Federal Reserve in the coming months further dampened demand for the dollar.
During the record-breaking government shutdown, market focus remained on economic data released by the US private sector. Tuesday’s ADP employment data highlighted concerns about a weak labor market and rekindled hopes for further easing by the Federal Reserve.
The latest ADP data showed that as of the end of October, US businesses were losing more than 11,000 jobs per week, prompting the market to raise its estimate of the probability of a Fed rate cut in December from 62% before the data release to approximately 68%.
The weak US jobs report boosted market expectations of a dovish stance from the Federal Reserve, while falling US Treasury yields cushioned downward pressure on gold. However, the dollar’s modest rebound limited gold’s three-day rally.
Looking ahead, with the market awaiting the release of US economic data, a temporary pullback in gold prices is unlikely. This data could further reveal the Federal Reserve’s future interest rate direction.
Furthermore, market focus will remain on the Republican-controlled House of Representatives’ vote later Wednesday on a compromise plan aimed at restoring government funding and ending the government shutdown that began on October 1.
Daily technical analysis
As observed on the daily chart, the 14-day RSI is turning slightly lower, currently near 59, but remains well above the midline.The leading indicator, thus, suggests that any downtick in Gold could be short-lived.
That being said, Gold closed Tuesday above $4,129, the 23.6% Fibonacci Retracement level of the parabolic rise to the record high that began on August 19.
However, buyers need to crack the $4,150 hurdle on a sustained basis to initiate a fresh uptrend toward the record high of $4,382.Ahead of that, the $4,200 round level will be put to test.
Conversely, the initial support is located at the 21-day SMA at $4,085, below which the $4,050 psychological level will be challenged.
The line in the sand for Gold buyers is seen at $3,973, the 38.2% Fibo level of the same advance.
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