XAU/USD Forecast: Gold Prices loses its shine, approaches $2,600
- FOMC Meeting Minutes and Fedspeak take center stage in the American afternoon.
- The market mood soured on talks US authorities could seek a Google breakout.
- XAU/USD pressures its weekly lows and gains downward traction in the near term.
On Tuesday, Spot Gold experienced a modest rebound after plummeting to $2,604.66. As investors anticipate the Federal Open Market Committee (FOMC) Meeting Minutes and Fedspeak, the XAU/USD pair approaches a low point in the American session.
However, the expectation that the document will provide new insight into future monetary policy appears to be unfounded. Since the Federal Reserve announced a 50 basis points (bps) interest rate reduction during its September meeting, a significant amount of water has flowed beneath the bridge.
The most widely recognised game-changer was the most recent Nonfarm Payrolls (NFP) report, which revealed that the country added more than 250,000 new job positions in September and that the unemployment rate decreased from 4.2% to 4.1%. The US Dollar was able to regain its equilibrium as a result of the market participants’ decreased bets on a potential 50 basis point rate reduction in November following the announcement.
Policymakers’ perspectives will be reflected in the FOMC Minutes prior to the release of reliable employment-related data. The majority of Fed speakers have already released statements in the wake of the Fed’s actions, and it is improbable that they will provide any new insights.
In the interim, markets are experiencing a risk-off sentiment. Local share markets were weakened by the diminishing enthusiasm surrounding Chinese stimulus, and the US Department of Justice’s potential breakup of Google also impacted stock markets. Wall Street traded in a divided manner, with the S&P500 retaining its modest gains.
XAU/USD short-term technical Outlook
The XAU/USD pair daily chart shows it is down for a sixth consecutive day, with an increased bearish potential. Technical indicators offer firmly bearish slopes, although still above their midlines, while the bright metal currently develops below a still bullish 20 Exponential Moving Average (EMA). The 100 and 200 SMAs, in the meantime, remain far below the current level, maintaining their upward slopes.
In the near term, and according to the 4-hour chart, the bearish case is stronger. A bearish 20 EMA is about to cross below a mostly flat 100 EMA, both at around 2,635. Technical indicators, in the meantime, have accelerated south within negative levels, in line with continued selling pressure.
Support levels: 2,603.90 2,589.10 2,575.20
Resistance levels: 2,625.40 2,637.10 2,652.90
