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Gold price (XAU/USD) surrenders a major part of its intraday gains and retreats to the lower end of the daily range during the first half of the European session on Friday. The growing market conviction that the Federal Reserve (Fed) will adopt a cautious stance on cutting interest rates, amid signs that the progress in lowering inflation to its 2% target has stalled, remains supportive of elevated US Treasury bond yields. This, in turn, assists the US Dollar (USD) to preserve its gains registered over the past week or so, to a fresh monthly peak and acts as a headwind for the non-yielding yellow metal.Any meaningful downside for the Gold price, however, seems limited as traders might refrain from placing aggressive bets and opt to move to the sidelines ahead of the highly-anticipated two-day FOMC policy meeting starting next Tuesday. Apart from this, geopolitical risks stemming from the Russia-Ukraine war and tensions in the Middle East, along with concerns over US President-elect Donald Trump’s tariff plans, might support the safe-haven bullion. This, in turn, warrants some caution before positioning for an extension of the previous day’s sharp retracement slide from a five-week high.
Gold price lacks bullish conviction amid elevated US bond yields
Gold price needs to break below $2,675 for bears to seize control
From a technical perspective, any further strength back above the $2,700 mark is likely to confront resistance near the $2,725-26 region or the monthly high touched on Thursday. The subsequent move up could lift the Gold price to the $2,735 intermediate hurdle en route to the $2,748-2,750 supply zone. The next relevant barrier is pegged near the $2,775 region, above which bulls might aim to challenge the all-time peak, around the $2,800 neighborhood touched in October.On the flip side, the $2,675-2,674 area now seems to have emerged as an immediate strong support. A convincing break below, however, might prompt some technical selling and pave the way for further losses towards the $2,658-2,656 confluence – comprising 50- and 200-period Simple Moving Averages (SMAs) on the 4-hour chart. The latter should act as a key pivotal point, which if broken decisively could make the Gold price vulnerable to weaken further towards the $2,632-2,630 area en route to the $2,600 round-figure mark.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen. More By This Author:WTI Consolidates Around $69.65-$69.70 Area, Below Monthly Peak Set On Thursday AUD/USD Rebound Halts At 0.6425 And Keeps The Bearish Trend Intact XAG/USD Bulls Retain Control Above $32.00, Over One-Month High