Search ForexCrunch
  • Gold price gains $1,800 level as demand for safe-haven assets rises.
  • The upside may remain shallow amid strong US yields and a rise in the stock markets.
  • ECB and US GDP are the key event today that may provide fresh impetus to the market.

Thursday’s Asian session saw gold price rebound from the weekly lows following Wednesday’s rebound. However, a combination of factors could limit any new gains for XAU/USD above $ 1,800.

-Are you looking for automated trading? Check our detailed guide-

Generally, the positive stock market sentiment could endanger precious metals’ demand as safe-havens. Furthermore, the strong growth in US Treasury yields and expectations that a major central bank will tighten monetary policy shortly could dampen the growth of the low-yielding yellow metal.

The yield on the 10-year Treasury bond increased 2.6 basis points (bps) to 1.55%, their steepest daily decline since mid-August. Perhaps the US Federal Reserve System (FRS) and the European Central Bank (ECB) anticipate tighter monetary conditions as their global counterparts monitor them. However, recent developments from developed countries have led to more reliable inflation expectations and lessened concerns about the Coronavirus.

The Bank of Canada (BOC) cut its bond issuance on Wednesday, while the UK also stopped buying bonds. Additionally, the Reserve Bank of Australia (RBA) is hiking rates due to strong Australian CPI data.

A weaker-than-expected US trade balance and improved orders for durable goods helped US dollar bulls outperform all-important GDP in the third quarter and indirectly help gold buyers.

Ahead of the December deadline for extending the debt ceiling, the White House insists on accelerating budget negotiations. In addition, Democrats are expected to meet with President Biden to discuss some of the latest issues with expectations of a long-awaited economic stimulus package.

Moreover, US-China tensions have been escalating again, most recently over telecoms and Taiwan, while Evergrande fears continue, which in turn support gold’s role as a safe haven.

Additionally, investors have taken a backseat ahead of Thursday’s key event – the long-awaited meeting of the European Central Bank. Even though the ECB is expected to keep its monetary policy parameters unchanged, market volatility is likely due to worries about inflation. Additionally, traders will be watching the release of the US preliminary GDP report for the third quarter. The data will stimulate dollar demand and impact dollar-denominated commodities, including gold.

– If you want to find out more about MT4 forex brokers, read our comprehensive guide –

Gold price technical analysis: $1,800 remains the key

Gold price aalysis 4-hour chart

The gold price remains slightly above $1,800. The price is above the 20-period SMA on the 4-hour chart. The bulls may attempt to test the $1,810-15 area. Any further rise may lead to $1,830. However, the recent price action does not suggest a clear bullish momentum. Rather, the price is still within the range and is consolidating. The $1,800 mark itself is a strong barrier to overcome. We may see a price rejection from here to test the $1,780 area.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.