The gold price is at $1,945, the highest level of the last four weeks. The yellow metal is holding on to recent gains as the US Dollar remains generally under pressure and US Treasury bond yields decline. Gold investors are waiting for a group of Fed speakers for the next rally. Additionally, investors are preparing for US Federal Reserve Chairman Jerome Powell’s speech on Thursday.
Gold price continues its rise with supportive developments
On Wednesday, the US Dollar tracked US Treasury yields retreating from one-week highs. This reduced the optimism created by investors’ optimistic Chinese economic data announcements in the market for a short time. The National Bureau of Statistics (NBS) showed on Wednesday that China’s economy expanded at an annual rate of 4.9% in the third quarter of this year, compared to 6.3% growth in the second quarter, beating forecasts of 4.4%. China’s September Retail Sales rose 5.5% on a yearly basis, compared to expectations of 4.9% and previous data of 4.6%.
Additionally, there are no signs of easing tensions in the Hamas-Israeli military conflict. This continues to be the main risk-off factor underlying the mild weather. Therefore, the search for safety remains supportive for the gold price. This allows the shiny metal to return to the highest levels of the last few weeks.
The determining factor for the gold price: US Dollar
Meanwhile, cryptokoin.comAs you follow from , Fed officials are making dovish comments. The US Dollar then struggles to benefit from increased safe-haven demand. Additionally, these comments reinforce the Fed’s decision to pause interest rate hikes in November.
The upbeat US Retail Sales report provided some temporary support to the US Dollar on Tuesday. U.S. Retail Sales, not adjusted for inflation, rose 0.7%, following upwardly revised increases in the previous two months, according to the Commerce Department. Meanwhile, the US has restricted Nvidia Made in China sales with a new set of rules. This news also helped the US Dollar find demand. But Richmond Fed President Thomas Barkin said, “I believe we have a restrictive policy stance.” After this, the Dollar gave back its gains. Against this backdrop, the gold price oscillated between gains and losses. Ultimately, it finished Tuesday in the green in a risk-averse market environment.
Gold investors will follow these events
Looking ahead, alarm from Fed officials ahead of the Fed’s Beige Book will dominate American business. It will also provide new clues about the central bank’s policy path. The Fed’s statements, combined with mid-level US economic data and corporate earnings results, will provide new trading momentum for gold investors. Tensions in the Middle East will continue to attract attention.
Gold price technical analysis: More room above!
Market analyst Dhwani Mehta interprets the technical outlook for gold as follows. The gold price reached a four-week high of $1,945 early Wednesday before entering an upward consolidation phase. Despite a minor pullback, gold continues to hold above the critical 20-Day Moving Average (DMA) of $1,930. The 14-day Relative Strength Index (RSI) indicator is pointing higher above the middle line. This shows that there is more room upside.
The next level of resistance lies at $1,947, the September 20 high. Moreover, there is a test of the September 1 high at $1,953 above it. A sustainable move above the latter could trigger a new uptrend towards the $1,970-1,980 supply zone. Things will change if the gold price fails to find a strong foothold above the 200 DMA at $1,930. In this case, a pullback towards the 100 DMA support at $1,923 would be on the cards. Further south, the previous day’s low of $1,912 will be on gold sellers’ radar.
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