XAU/USD Fundamental Analysis
On Wednesday, Gold prices edged lower after traders started to book profits ahead of the slew of US economic data the next day. The GDP report due on Thursday could influence the Federal Reserve’s decisions in the upcoming monetary policy meeting. Gold prices were moving with a -0.14% loss in 24 hours on 25th January.
Meanwhile, when traders were booking profits and giving price corrections in the market, most analysts believed that it was only strengthening the upward trend and making it healthy. Yesterday, Gold prices hit the 9-month highest level in 1942 amid rising concerns regarding the global recession
n. Furthermore, the optimism surrounding the easing of an interest rate hike by the Federal Reserve added to the yellow metal’s strength.
A whole range of US economic data is scheduled on Thursday. Traders were playing safe ahead of it by booking their profits to avoid any mishap. Therefore, the price corrected a little on Wednesday. The US Economic docket will be releasing GDP estimates for the 4th quarter, durable goods orders, weekly initial unemployment claims, and new home sales data.
XAU/USD Technical Analysis
Gold which been on an upward trend since December at a steady pace. However, since Mid-January, there has been a slight tilt in the rising trend of yellow metal prices. It can be seen within the red vertical lines.
The MACD indicators are moving below the red signal line, suggesting some selling pressure in the market. However, RSI, on the other hand, is showing some upward trend, with the indicator line moving to an upward trajectory. Furthermore, the Stochastic Oscillator is also giving a bullish trend ahead, with a blue line about to cut the red line from below.
If the prices continued to move upward, they could first face psychological resistance in 1942. There are higher chances that prices will break above this level. It will continue to move upward towards the second resistance of 1955. Any break above this level will push the prices towards fresh new highs towards levels last seen in April 2022 near 1960.
In the bearish scenario, if prices fail to hold onto the gains and start dropping, the immediate support will be at the 50-Day SMA (yellow line) at 1920. If the selling pressure accelerates, the next stop would be 1911. A break below this level will unleash selling pressure towards the third support (S3) level at 1911.
Overall, the recent decline in gold prices seems to be temporary. Also, the indicators give more upside flags than downside ones.
XAU/USD Daily Technical Levels
Pivot Point: 1932.40