Gold price advances to three-week top
Wednesday saw the gold price (XAU/USD) rise for the second day in a row, as it reached a one-and-a-half-week high in the $2,670 range during the Asian session. In light of the current Middle East wars and other geopolitical uncertainties, the risk-off impulse is viewed as a crucial element providing some support to the safe-haven precious metal.
The price of gold is not given much of a boost by the US Dollar (USD), which is consolidating its recent strong gains to a height that has been above two months. However, any significant USD corrective slide should be constrained by growing expectations for a less aggressive policy easing by the Fed and wagers on a normal 25 basis point (bps) rate cut in November. Before making bullish wagers on the non-yielding yellow metal, this calls for prudence.
Technical Outlook: Bullish potential is intact.
Technically speaking, any further increase is probably going to run into some resistance close to the $2,685 area or the record high reached in September. Next in line is the $2,700 psychological level.
However, short-term support is located close to the $2,650 mark, below which the price of gold may drop to the $2,641 mark, which is around the 4-hour 72 EMA. Further declines are likely to draw some buyers and keep the price close to the $2,600 psychological level. If the latter is clearly violated, it might serve as a crucial turning point that triggers technical selling and opens the door to further losses.
The price of gold is not given much of a boost by the US Dollar (USD), which is consolidating its recent strong gains to a height that has been above two months. However, any significant USD corrective slide should be constrained by growing expectations for a less aggressive policy easing by the Fed and wagers on a normal 25 basis point (bps) rate cut in November. Before making bullish wagers on the non-yielding yellow metal, this calls for prudence.
Technical Outlook: Bullish potential is intact.
Technically speaking, any further increase is probably going to run into some resistance close to the $2,685 area or the record high reached in September. Next in line is the $2,700 psychological level.
However, short-term support is located close to the $2,650 mark, below which the price of gold may drop to the $2,641 mark, which is around the 4-hour 72 EMA. Further declines are likely to draw some buyers and keep the price close to the $2,600 psychological level. If the latter is clearly violated, it might serve as a crucial turning point that triggers technical selling and opens the door to further losses.
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