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Gold Price Attracting Longs Above $1,954, Focus on Key Events

  • The XAU/USD rally is natural after the last sell-off.
  • USD’s depreciation lifted the XAU/USD.
  • The BOC could have a big impact tomorrow.

The gold price turned to the upside after reaching yesterday’s low of $1,938. Now, the precious metal is trading at $1,962. It seems determined to approach new highs.

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USD’s depreciation helped the yellow metal to come back higher. DXY’s deeper drop should bring more buyers to the XAU/USD. Still, after yesterday’s rally, a minor retreat is natural.

Fundamentally, gold’s rally is also attributed to the US ISM Services PMI, which came at 50.3 points versus 52.6 points expected and compared to 51.9 points in the previous reporting period. In addition, Factory Orders and Final Services PMI came in worse than expected.

Today, the Reserve Bank of Australia unexpectedly increased the Cash Rate from 3.85% to 4.10%. The traders expected the rate to remain steady at 3.85%.

Later, the Canadian Ivey PMI and Building Permits could have an impact on the USD, so the XAU/USD could react as well.

Tomorrow, the RBA Gov Lowe Speaks, Australian GDP and BOC represent high-impact events. The Bank of Canada is expected to keep the BOC Rate Statement at 4.50%.

Gold price technical analysis: Accumulating bullish energy

Gold price hourly chart
Gold price hourly chart

The XAU/USD rallied after failing to retest the $1,935 – 1,932 support zone. Now, it has jumped and stabilized above the weekly pivot point of $1,954.

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The yellow metal could extend its growth if it stays above this support. A minor retreat or a sideways movement should announce a new bullish momentum.

After its massive drop, the current swing higher is natural. The weekly R1 of 1,977 and the descending pitchfork’s upper median line (UML) represent upside obstacles and targets if the price continues to grow.

Only coming back and stabilizing under the pivot point invalidates the upside scenario and signals a potential sell-off towards the former lows.

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Olimpiu Tuns

Olimpiu Tuns

Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.