VOT Research Desk
Over $1,750, XAUUSD ended up ending the week with minimal change. The US Dollar’s (USD) valuation and the movement of the pair could be influenced by the minutes of the Federal Reserve’s October policy meeting and the PMI surveys the following week.
Governor of the Federal Reserve Christopher Waller stated over the weekend that markets were far out in front and that rates won’t decrease unless there is “clear, solid” proof that inflation is declining.
In a similar vein, San Francisco Fed President Mary Daly suggested that markets should start focusing on the level of rate increases rather than their speed.
These remarks reduced the risk rally’s momentum and helped the USD maintain its competitiveness versus its rivals, which constrained the upside potential of XAUUSD on Monday.
Housing Starts and Building Permits both fell in October, according to data released on Thursday by the US Census Bureau, by 4.2% and 2.4%, respectively.
These numbers made it challenging for the USD to continue its recovery by serving as a reminder to investors of the detrimental effects that higher rates have on the housing market.
However, despite the benchmark 10-year Treasury bond yield seeing a 2% hike, gold prices concluded the day in the red.
On the final trading day of the week, markets were rather quiet due to the lack of significant macroeconomic data releases, and XAUUSD moved in a constrained channel at roughly $1,760.
Gold Technical Analysis
The daily chart’s Relative Strength Index (RSI) indicator slightly declined after rising above 70 earlier in the week, indicating that the most recent dip is merely a technical correction and not the start of a negative trend.
The price of gold also maintains a comfortable lead over the 100-period Simple Moving Average (SMA).
The Fibonacci 38.2% retracement of the March–November downtrend, around $1,780, serves as the first level of resistance on the upswing.
XAUUSD is projected to encounter significant resistance at $1,800 (200-day SMA), before aiming for $1,830 (Fibonacci 50% retracement), with a daily closure above that level. At $1,750, interim support appears to have developed.
If XAUUSD breaks through that level and begins to use it as resistance, it may continue to decline toward $1,720 (100-day SMA, Fibonacci 23.6% retracement), $1,700 (psychological support), and other levels.
