XAU/USD gold prices failed to achieve more than the resistance level of 1759 dollars an ounce during yesterday's trading, as the US dollar recovered against everyone. This caused the price of gold to decline to the support level of 1740 dollars an ounce. XAU/USD Gold futures attempted to recover as investors watched a huge recovery in the Asian markets. The price of the yellow metal also recorded gains due to the weakness of the US dollar, as investors prepare for the long-awaited speech of Federal Reserve Chairman Jerome Powell on Wednesday.
Can gold compensate for more losses as 2023 approaches?
Gold prices are on their way to record their best month since the summer of 2020, as they are poised for gains of 7%. From the beginning of the year 2022 to date, the price of gold has decreased by about 4%. In the same performance, the price of silver, the sister commodity to gold, is looking forward to testing the $22 level. The price of the white metal is on track for a November increase of about 13%, although it is down about 7% over the year.
Despite initial selling in early trading this week in the wake of nationwide COVID protests in China, the Shanghai Composite and Hang Seng Index rose 2.3% and 5.2%, respectively, on Tuesday. This gave investors the bulls because the demonstrations may not lead to a market-wide contagion effect. Indeed, investors are optimistic that the Chinese Communist Party may choose to ease its COVID-zero policies to quell the protests. This lifted most commodities, although some market experts and political observers have some doubts about this end result.
Meanwhile, the US Dollar Index (DXY) fell to 106.41 from an opening of 106.57. The index is on track for a November drop of 4.5%, trimming its massive one-year rise to below 11%. A lower dollar rate is good for dollar-denominated commodities because it makes it cheaper for foreign investors to buy them.
Other factors affecting the gold market
The US Treasury market was mixed, with the benchmark 10-year yield rising 2.4 basis points to 3.726%. One-year yields were flat at 4.761%, while 30-year yields jumped 2.5 basis points to 3.774%. The spread indicating recession remained at around -50 basis points.
On the economic data front, the Conference Board's US Consumer Confidence Index (CCI) fell to 100.2 in November, down from 102.2 in October. The Dallas Fed Services Index remained in contraction territory at -11. The S&P/Case-Shiller Home fell 10.4% year-over-year and fell 1.5% month-over-month in September.
As for other metals markets, copper futures jumped to $3.6515 a pound. Platinum futures rose to $1015.50 an ounce. Palladium futures rose to $1853.00 an ounce.
XAU/USD gold price forecast today:
The bullish trend in XAU/USD gold prices is seeing a trend reversal as inflation and the US interest rate continue to increase. This has been a bearish 2022 for gold prices but there is hope for a bullish reversal as the Fed looks to ease as it raises interest rates. Investors can expect gold's bullish trend to continue as the inflation rate continues to remain at a high level while the rise in interest rates may slow.
- The XAU/USD gold price on the weekly chart remains near the previous bullish move's high.
- There is no higher peak drawn on the chart yet which means there is a risk of a bearish reversal.
- If gold prices start to fall again, a downward continuation could occur.
- Investors may want to remain cautious for now.
According to the performance on the daily chart, the XAU/USD gold price is going through a downward movement after the new higher high on the chart. It is supported at $1,730 or the previous swing high. If the price can bounce back and move up with a strong upward movement and print a new higher high, then the upward movement may develop into a new bullish trend.
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