Gold finding supports near 2535-2540$ area, Whats Next?

The Gold price (XAU/USD) struggles to gain ground around $2,570 on Friday after bouncing off a two-month low in the previous session. The precious metal remains under selling pressure amid the strong US Dollar (USD) and the rising uncertainty surrounding the Federal Reserve's (Fed) pace of interest rate reductions. The expectations of higher inflation next year due to Donald Trump’s policies have led to fewer expected rate cuts, weighing on the yellow metal as higher interest rates make holding non-yielding assets like gold less appealing. 

Currently Gold is trading at 2561$(-0.15%). Technically, Gold made a Hammer Candle on Thursday around 89DSMA which is showing that bulls are trying to enter into the game. Additionally, RSI Divergence is visible on Gold 4hr chart which shows that Bears are losing momentum. However, going above Gold may face Multiple Resistance around $2579-2585 region as 1hr 55SMA & 4hr 20SMA is coming. We feel that Gold prices need to consolidate around this region for further direction of the market. Additionally, If Gold prices are again breaking the Thursday's Level at $2536-40 then it can test $2500 on downside.

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Maddy

Cross-Asset Analyst & Trainer

Varun Sharma

Senior Strategist

VJ Yadav

FX Strategist

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