VOT Research Desk
Despite failing to close above $1,800, gold price benefited from the general US Dollar weakening and ended up by almost 2% this week.
Investors will closely monitor Chinese news stories about the coronavirus in the absence of high-impact data releases from the US and evaluate XAU/technical USD’s developments for new directional cues.
On Monday, the US economic docket will include a discussion of the ISM Services PMI data. The Prices Paid Index is anticipated to increase from 70.7 in October to 73.6 in November.
The market’s response to the ISM Manufacturing PMI indicates that, should the inflation component drop in November, the US Dollar is likely to lose ground against its competitors.
On the other side, a rise in the Prices Paid Index along with an anticipated headline PMI report of about 55 should support the USD and put pressure on XAU/USD.
Market participants will closely monitor developments related to China’s zero-Covid policy in the absence of any other important macroeconomic data releases.
Gold Technical Analysis
Despite Friday’s dip, the price of gold maintains its bullish bias, and the daily chart’s Relative Strength Index (RSI) signal is comfortably above 50.
A crucial pivot mark on the upswing is $1,800 (psychological level, 200-day Simple Moving Average (SMA)).
XAU/USD may aim for $1,830 (the Fibonacci 50% retracement of the long-term downtrend) and $1,860 (the static level) after stabilizing above that level by using it as support.
Sellers may become active and push XAU/USD lower toward $1,740 (a static level) and $1,720 (a Fibonacci 23.6% retracement, 50-day SMA), depending on whether gold price falls below $1,780 (a Fibonacci 38.2% retracement) and fails to retake that level.
