Market Analytics and Considerations
Key Notes
Candle close is important; rising wedge is still a consideration.
Foundational Landscape of XAU/USD
After a huge surge fueled by what appears to be technical mechanics, gold is off to a strong start in 2023. The advance can only be explained by technical buys because the U.S. dollar is indeed up this morning (customarily, there is an inverted relationship between the two), inflation influences haven’t changed, and economic instability hasn’t increased. Markets may be ignoring recent Fed signals on continued hawkish fiscal policy, but if this position is reiterated in tomorrow’s FOMC conclusions, XAU/USD may once again go under 1830.00.
The issuance of the December U.S. manufacturing PMI will be the only piece of data with any real relevance today. Nevertheless, because the economy is mostly powered by services, the manufacturing read is unlikely to significantly affect gold’s price.
Technical Picture
On the daily spot gold chart, the daily candle for today is 1.22% stronger at the beginning of the European session, having recently broken above the psychological milestone of 1850.00. This doesn’t necessarily rule out the ascending wedge chart formation that is now developing, but a daily candle closure just above wedge’s resistance and 1850.00 may trigger another upward leg into the cycle high of 1879.45.
On the other hand, a closure beneath wedge barrier could encourage bears to support down prices than 1830.00. The Relative Strength Index (RSI), which is currently watching backwardation dispersion from gold prices, may corroborate this prediction.
Key Resistance levels:
1879.45
1850.00
Key Support levels:
1830.00
1824.47
1800.00
