GOLD Price Analysis – Oct 15, 2024
Daily Price Outlook
Gold prices (XAU/USD) have managed to halt their overnight losses, finding solid support around the $2,655 level during the early European session on Tuesday. This stability comes amid ongoing geopolitical tensions and growing concerns about a broader conflict in the Middle East, which continue to boost demand for safe-haven assets like gold.
However, the US dollar remains strong, bolstered by expectations that the Federal Reserve will adopt a less aggressive approach to policy easing. This strength in the dollar could limit any potential gains for gold. Additionally, disappointment over China’s fiscal stimulus measures has dampened investor confidence, which may also contribute to capping XAU/USD’s upward momentum.
US Dollar Strength Limits Gold’s Gains Amid Geopolitical Tensions
On the US front, the broad-based US Dollar surged to its highest level since August 8, driven by expectations that the Federal Reserve will ease its policy less aggressively. Traders are now betting on a 25 basis point interest rate cut in November. Minneapolis Fed President Neel Kashkari said on Monday that the current monetary policy is still restrictive, and modest interest rate cuts may be appropriate as the job market remains strong.
Similarly, Fed Governor Christopher Waller noted that the economy is on solid ground and may not be slowing down as much as expected, suggesting that the Fed should be cautious with further rate cuts.
This bullish bias in the US Dollar could limit gains in gold prices, as a stronger dollar typically makes gold more expensive for foreign investors. However, gold remains supported by concerns over geopolitical tensions and potential conflicts in the Middle East, which are boosting demand for safe-haven assets.
Traders will now turn their attention to the release of the Empire State Manufacturing Index and more comments from Fed officials, both of which could provide short-term trading opportunities for XAU/USD later in the North American session.
GOLD (XAU/USD) - Technical Analysis
Gold is currently trading at $2,644.41, down 0.16% in the last session, as it hovers near key technical levels. The precious metal has struggled to break above the critical resistance level of $2,659, indicating that bullish momentum may be fading. Immediate resistance stands at $2,665, and a breakout above this level could signal a push toward higher targets at $2,674 and $2,685, which align with Fibonacci retracement levels. However, failure to overcome resistance may open the door for further downside.
On the support side, gold finds immediate support at $2,635, which is also the level of the 50-day EMA, providing a key area of defense for bulls. A breach below this could see prices testing $2,622, with the next critical support at $2,611. The RSI is currently at 48, indicating neutral momentum with a slight bearish tilt, suggesting that the market could be vulnerable to further selling pressure if key support levels fail to hold.
In conclusion, the immediate strategy is to buy above $2,637, with a target of $2,659 and a stop-loss at $2,626. Traders should monitor the $2,665 resistance carefully, as a break above could shift the short-term outlook to bullish.
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