XAUUSD Ready for a Rebound?

17 paź 2023

The recent decline in the price of gold is primarily due to increased risk aversion, leading to a surge in demand for the US Dollar as a safe-haven asset. This shift is driven by persistent concerns regarding the Chinese property market, particularly the potential default of Country Garden's offshore debt if a payment due on Tuesday is not made. Additionally, the ongoing Hamas-Israel conflict is a significant factor dampening investor sentiment. Despite a rally on Wall Street following optimism about US and allied diplomatic efforts to mitigate the Middle East conflict, there is unease in the financial markets due to the lack of positive outcomes from a lengthy meeting between Israel President Netanyahu and US Secretary of State Antony Blinken. Investors are also exercising caution in anticipation of key third-quarter earnings reports from the United States. The recovery of US Treasury bond yields is further supporting the rebound of the US Dollar at the expense of the Gold price. This occurs even in the face of dovish comments from Philadelphia Fed President Patrick Harker, emphasizing a current stance against interest rate increases. Looking ahead, the focus is on the notable US Retail Sales data, which is anticipated to exhibit a 0.3% decline in September. Gold traders will closely monitor comments from various Fed policymakers. Additionally, updates on the Middle East conflict will continue to heavily influence risk sentiment, impacting both the valuation of the US Dollar and the actions of the Gold price. In fact, the market is moving between two swings, within a range between 1912 and 1923. At the moment, the price expectation seems more long-term, with a bounce at the intersection of the two trendlines at the 1914 level and a consequent readiness at the 1942 level where we have an H4 supply zone. Let me know what you think, comment, and leave a like to support our work. Greetings from Nicola, the CEO of Forex48 Trading Academy.