The gold price is currently at its lowest levels in the last three weeks. The shiny metal continues to trade in a challenging environment that attracts attention. This challenging environment is dominated by a resilient US dollar and key US inflation (CPI) data, which traders are watching closely to gauge the Federal Reserve’s next move on interest rates.
ANZ: Gold price may retreat to $1,900!
cryptokoin.comAs you follow from , gold rose above $2,000 due to the impact of geopolitical tension. However, it failed to stay above this level. Last week, gold witnessed a significant decline of 2.8%, the steepest decline in the last month. Fed Chairman Jerome Powell’s hawkish statements that reduced interest rate cut hopes were effective in this. According to ANZ Bank analysts, gold’s technical chart shows that a fall below the $1,930 level could trigger selling. In this context, analysts draw attention to the following levels for the gold price:
The price might find support near the 200-DMA at $1,934. If gold trades in the $1,930-$2,000 range, the uptrend will remain intact. However, a decline below $1,930 could create selling pressure and the price could decline to $1,900 in the near term. On the upside, any price recovery might face resistance at $2,000. Breaking this level is currently unlikely. However, short positions that could push the price higher towards the next resistance at $2,062, the high recorded in May 2023, could trigger a cover. On balance, we expect gold to trade in the $1,930 – $2,000 range.
Economic indicators and gold’s reaction
Upcoming US consumer price index (CPI) data, which is expected to show continued inflationary pressures, plays a critical role in this narrative. The dollar strengthened further on expectations of persistent inflation. Thus, it reduced the attractiveness of gold for investors who held other currencies.
While investors await the release of the CPI, attention is also turning to US retail sales data, which will provide insight into consumer demand amid higher borrowing costs. These economic indicators are of great importance in shaping market expectations about the Fed’s ongoing fight against inflation and its impact on the price of gold. In the short term, the direction of gold remains in balance, influenced by the interaction of inflation data, the strength of the US dollar and economic growth indicators. Geopolitical risks and central bank purchases provide some support. However, the Fed’s monetary policy tightening cycle and the dollar’s direction remain pressures.
technical drawing of gold
Meanwhile, market analyst Lallalit Srijandorn conveys what he sees in the technical picture of gold as follows. Gold price is trending below the 50- and 100-hour Exponential Moving Averages (EMAs) on the four-hour chart. So, it supports sellers for now. The gold price is in the bearish zone below 50, indicating that the path of least resistance is to the downside in the near term. Gold price is likely to meet an initial resistance near the 100 hourly EMA at $1,960. Additional upside filtering is seen near the upper boundary of the Bollinger Band at $1,969. Further north, the next barrier lies at the $2,000 psychological round mark.
On the other hand, $1,930 serves as the first support level for the gold price. The next challenge will occur near the October 16 low at $1,908. Moreover, it will be followed by $1,900 (a round number).
Gold price technical outlook in a changing macro environment
Market analyst James Hyerczyk analyzes the technical outlook of gold as follows. Currently at $1,939.91, gold is trading just above its major 200-day moving average of $1,935.07. This points to a critical point that will determine the short and long-term market direction. This closeness to the 200-day average highlights a potential turning point. A sustained position above this level confirms a long-term uptrend.
Moreover, its position above the 50-day moving average of $1,923.28 also strengthens this bullish trend in the short term. The next test for gold’s upside momentum is the minor resistance level at $1,952.21. If it breaks through, it is possible that this level will pave the way to challenge the main resistance at $1,987.00. Conversely, a pullback in gold price would find initial support at $1,930.64, with a more important support level at $1,904.01 that could act as key levels to continue the current bullish view.
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