"Gold Holds Firm Before Powell"
Updated
In a recent surge, gold prices climbed modestly above the $1,950 mark, buoyed by a sustained breakthrough overnight through the 200-day Simple Moving Average (SMA) and an encouraging push beyond the $1,947-$1,948 supply zone. Technically, this breakthrough signifies a new catalyst for the upward trend. Furthermore, oscillators on the daily chart are holding in positive territory, suggesting there's ample room before overbought conditions.
This indicates that the path of least resistance for gold remains upwards. However, prudent caution is advised, waiting for further buy signals beyond the overnight highs around $1.962-$1.963, before positioning for any further upward momentum. Following this, XAU/USD might accelerate towards the intermediate resistance at $1.982, aiming to reclaim the psychological $2,000 level for the first time since May.
On the flip side, weaknesses below the $1.948-$1.947 region might find strong support near the 200-day SMA, currently around $1,930. Following that is the 100-day SMA around $1.922 before the $1.930 support zone. Below that, gold could slide back, challenging the crucial $1,900 level. The latter aligns with the 50-day SMA, serving as a robust foundation for XAU/USD.
The recent positive momentum in gold prices reached its peak on Wednesday, surging to the highest level since early August, around the $1.962-$1.963 region, amidst escalating tensions in the Middle East. This suggests that the rising yields on U.S. Treasury bonds, bolstered by the expectation that the Federal Reserve will maintain higher interest rates for an extended period, limiting gold's ascent, didn't deter buyers. Additionally, increased demand for the U.S. dollar has prompted profit-taking activities at higher levels, leading to a modest retracement.
However, this pullback lacks follow-through and stagnates near the $1.938 level. Ongoing geopolitical tensions continue to drive safe-haven flows, allowing gold to attract buying interest for the third consecutive day on Thursday. The precious metal maintained its upward trend throughout the first half of the European trading session, although lacking further significant upward movement. Speculative buyers appear cautious, refraining from strong bets ahead of Fed Chair Jerome Powell's speech. Investors will scrutinize Powell's policy signals, influencing both the dollar and XAU/USD.
In summary, gold's current trajectory remains upward, backed by technical factors and geopolitical uncertainties. Yet, a measured approach is advisable, with traders awaiting clear signals post-Powell's speech before committing to further bullish positions.
This indicates that the path of least resistance for gold remains upwards. However, prudent caution is advised, waiting for further buy signals beyond the overnight highs around $1.962-$1.963, before positioning for any further upward momentum. Following this, XAU/USD might accelerate towards the intermediate resistance at $1.982, aiming to reclaim the psychological $2,000 level for the first time since May.
On the flip side, weaknesses below the $1.948-$1.947 region might find strong support near the 200-day SMA, currently around $1,930. Following that is the 100-day SMA around $1.922 before the $1.930 support zone. Below that, gold could slide back, challenging the crucial $1,900 level. The latter aligns with the 50-day SMA, serving as a robust foundation for XAU/USD.
The recent positive momentum in gold prices reached its peak on Wednesday, surging to the highest level since early August, around the $1.962-$1.963 region, amidst escalating tensions in the Middle East. This suggests that the rising yields on U.S. Treasury bonds, bolstered by the expectation that the Federal Reserve will maintain higher interest rates for an extended period, limiting gold's ascent, didn't deter buyers. Additionally, increased demand for the U.S. dollar has prompted profit-taking activities at higher levels, leading to a modest retracement.
However, this pullback lacks follow-through and stagnates near the $1.938 level. Ongoing geopolitical tensions continue to drive safe-haven flows, allowing gold to attract buying interest for the third consecutive day on Thursday. The precious metal maintained its upward trend throughout the first half of the European trading session, although lacking further significant upward movement. Speculative buyers appear cautious, refraining from strong bets ahead of Fed Chair Jerome Powell's speech. Investors will scrutinize Powell's policy signals, influencing both the dollar and XAU/USD.
In summary, gold's current trajectory remains upward, backed by technical factors and geopolitical uncertainties. Yet, a measured approach is advisable, with traders awaiting clear signals post-Powell's speech before committing to further bullish positions.
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