GOLD | $1980 Support Break Eyed, Do Bears Have the Momentum?
PRICE FORECAST
XAUUSD
:
- Gold consolidates above key support as yields rise and psychological limit gains improve.
- DXY is trying to recover from Friday's sell-off.
Gold prices are consolidating after another attempt at $2000/oz on Friday. Despite the weaker US dollar, we are seeing a slight recovery in US bond yields and an improvement in risk appetite, which will certainly limit gains in the precious commodity.
The $2000/oz level remains a challenge for Gold, despite the weakening Dollar. Gold's safe-haven appeal may be fading. There is growing optimism that conflict in the Middle East can be avoided. Last week, the Fear and Greed index started at 30 and is now at 42.
Gold may be supported by the appeal of holding precious metals and a weaker US dollar. However, to sustain a break above $2000, continued weakness in US data is needed to confirm that the Fed has made up its mind. USD weakness and weaker US fundamentals could push Gold higher.
Improved sentiment and risk appetite could push Gold prices down to $1,950. There is also a $1,843/oz price gap that still needs to be closed, but it could take a long time to do so.
RISK EVENTS AHEAD
Over the next 48 hours, several Federal Reserve policymakers will speak. Fed Chairman Powell will close with comments on both Wednesday and Thursday. It will be interesting to see if there are any efforts to dampen market optimism that the Fed will raise interest rates. It is worth noting the comments of Fed policymaker Thomas Barkin, as he stated that it is too early to make assumptions about the Fed's outlook in December. Two more inflation reports are expected ahead of the Fed meeting, this will be very important.
TECHNICAL OUTLOOK
XAUUSD
From a technical perspective, Gold needs to maintain support above the $1977-1980 level on the daily timeframe to continue its upward momentum. However, there is notable selling pressure around the $2000/oz mark, as multiple attempts to push prices higher have failed. Friday's daily candle also showed a significant increase in wick, suggesting ongoing selling pressure above and around the $2000/oz mark.
The bullish structure remains intact as long as the daily candle does not close below the $1,968 support zone. It is possible that we could dip slightly below the $1,980 support level before bouncing back from the $1,968 area and towards the psychological level of $2,000/oz. The mixed signals are due to the uncertain macro and geopolitical situation, causing volatility and instability in 2023.
Key Levels to Keep an Eye On:
Resistance levels: 1992.89 - 2000.00 - 2008.00
Support levels: 1977.00 - 1968.00 - 1953.00
XAUUSD
: - Gold consolidates above key support as yields rise and psychological limit gains improve.
- DXY is trying to recover from Friday's sell-off.
Gold prices are consolidating after another attempt at $2000/oz on Friday. Despite the weaker US dollar, we are seeing a slight recovery in US bond yields and an improvement in risk appetite, which will certainly limit gains in the precious commodity.
The $2000/oz level remains a challenge for Gold, despite the weakening Dollar. Gold's safe-haven appeal may be fading. There is growing optimism that conflict in the Middle East can be avoided. Last week, the Fear and Greed index started at 30 and is now at 42.
Gold may be supported by the appeal of holding precious metals and a weaker US dollar. However, to sustain a break above $2000, continued weakness in US data is needed to confirm that the Fed has made up its mind. USD weakness and weaker US fundamentals could push Gold higher.
Improved sentiment and risk appetite could push Gold prices down to $1,950. There is also a $1,843/oz price gap that still needs to be closed, but it could take a long time to do so.
RISK EVENTS AHEAD
Over the next 48 hours, several Federal Reserve policymakers will speak. Fed Chairman Powell will close with comments on both Wednesday and Thursday. It will be interesting to see if there are any efforts to dampen market optimism that the Fed will raise interest rates. It is worth noting the comments of Fed policymaker Thomas Barkin, as he stated that it is too early to make assumptions about the Fed's outlook in December. Two more inflation reports are expected ahead of the Fed meeting, this will be very important.
TECHNICAL OUTLOOK
XAUUSD
From a technical perspective, Gold needs to maintain support above the $1977-1980 level on the daily timeframe to continue its upward momentum. However, there is notable selling pressure around the $2000/oz mark, as multiple attempts to push prices higher have failed. Friday's daily candle also showed a significant increase in wick, suggesting ongoing selling pressure above and around the $2000/oz mark.
The bullish structure remains intact as long as the daily candle does not close below the $1,968 support zone. It is possible that we could dip slightly below the $1,980 support level before bouncing back from the $1,968 area and towards the psychological level of $2,000/oz. The mixed signals are due to the uncertain macro and geopolitical situation, causing volatility and instability in 2023.
Key Levels to Keep an Eye On:
Resistance levels: 1992.89 - 2000.00 - 2008.00
Support levels: 1977.00 - 1968.00 - 1953.00
