XAUUSD: Breakout of 2000 in sight!

17 lis 2023

Gold, consolidating above $1,980 this Friday, aims to break a two-week downtrend. Despite the potential for a US dollar recovery, the decline in Treasury bond yields supports gold's upward movement. Surging above the 21-day Simple Moving Average at $1,974, Thursday's close motivated buyers. The 14-day Relative Strength Index remains comfortably above the midline, confirming the upward trend. The next challenge is the descending trendline resistance at $1,992, near the November 6 high of $1,993. A breakthrough could push buyers to target the psychological $2,000 level. In case of selling pressure, initial support lies at the 21-day SMA at $1,974, with a risk of rapid decline to $1,960. Further downward extension may test psychological support at $1,950. Gold remains influenced by risk trends and Federal Reserve statements. US-China trade tensions and Fed rate uncertainty keep investors cautious. In a market of uncertainty, the safe-haven US dollar limits gold's upward attempts. However, gold benefits from recent Treasury bond yield declines, with hopes the Fed's rate-hiking cycle is done and rate cuts are anticipated by May next year. Weak US economic data reinforced expectations of a Fed pause, justifying the gold surge. In October, the US Producer Price Index had its steepest decline in three and a half years, and Consumer Price Index inflation dropped to 3.2% YoY. Retail sales fell 0.1% in October. Thursday saw US initial claims rise by 13,000 to 231,000 for the week ending November 11. Gold prices are likely to maintain an upward trend, but end-of-week profit-taking and a potential US dollar recovery may pose challenges. Data on US housing starts and building permits are expected to have a limited impact on US dollar trading.