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XAU/USD Current price: 2,036.90
- Financial markets completed bets on delayed rate cuts, USD demand eased.
- Federal Reserve speakers stand out in an otherwise quiet week.
- XAU/USD trimmed part of its latest losses, turned technically neutral.
Spot Gold recovers ground on Monday as demand for the US Dollar receded. The XAU/USD pair trades near an intraday high of $2,038.17, recovering some of the ground shed in the last few days. Financial markets are all about delayed rate cuts following central bankers from around the globe pouring cold water on investors’ expectations of tighter monetary policies. On Tuesday, it was the turn of the Reserve Bank of Australia (RBA) to join the cautious stance, as policymakers decided to leave the door open for additional hikes should conditions require it.
Meanwhile, solid US macroeconomic data further undermined the odds of a Federal Reserve (Fed) cut. As a result, government bond yields rallied, backing the US Dollar. By Tuesday, it seems investors have completed repositioning in this new scenario. Bonds recovered, and yields retreated, limiting demand for the USD.
Data-wise, the macroeconomic calendar has nothing relevant to offer these days, although multiple Fed speakers will be on the wires. Loretta Mester, President and Chief Executive Officer of the Federal Reserve Bank of Cleveland, will be on the wires later in the day.
XAU/USD short-term technical outlook
From a technical point of view, the XAU/USD pair is neutral, according to the daily chart. Technical indicators have turned north, hovering around their midlines, without enough momentum to confirm another leg north. At the same time, the pair seesaws around a flat 20 Simple Moving Average (SMA), currently at around $2,030.40. On a positive note, XAU/USD develops well above its longer moving averages, with the 100 SMA advancing above the 200 SMA, suggesting the risk skews to the upside in the longer term.
In the near term, the odds for another leg north seem more limited. XAU/USD recovered above a flat 100 SMA, but it’s currently batting a bearish 20 SMA, unable to extend gains beyond the level. Finally, technical indicators are correcting oversold conditions, yet remain within negative levels. Gold could have better chances if the pair advances beyond $2,039.60, the immediate resistance level.
Support levels: 2,022.75 2,009.10 1,988.90
Resistance levels: 2,039.60 2,053.10 2.065.60
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