Gold price cheers the markets’ re-pricing of the global tightening expectations, looking to recapture the $1800 mark. Gold price rallied hard, despite the resurgent US dollar demand on Thursday, as the dovish BOE rate decision added to the Fed’s push back of the lift-off bets. 

Gold prices soared to fresh weekly highs, with spot hitting an intraday high of $1,798.90 a troy ounce. The bright metal jumped following the Bank of England monetary policy announcement, as the UK central bank decided to keep rates and the APP unchanged. Market players were hoping policymakers will hike rates, amid previous hints from Governor Andrew Bailey.

The BOE’s announcement came after the US Federal Reserve announced it would start trimming QE by $15 billion per month, also a widely anticipated movement. In both cases, policymakers tried to down talk price pressures and referred to temporal issues being behind rising inflation.

The bright metal also benefited from the poor tone of Wall Street, as US indexes dipped right after the opening, currently trading with a mixed tone.  The week will end with another bang, as the US will publish the November Nonfarm Payrolls report. The country is expected to have added 425K new jobs in October, after two months of poor figures.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES : (TECHNICALS)

XAU/USD is back to its comfort zone in the $1,790 region, trading around the 23.6% retracement of its September/October rally. It bottomed on Wednesday near the 61.8% retracement, which somehow opens the door for a test of the October high at 1,813.80

The daily chart shows that moving averages remain directionless and in a limited range, with the price currently struggling to overcome the top of such a range. Technical indicators changed course and reentered positive territory, although holding within familiar levels.

According to the 4-hour chart, the bright metal is neutral-to-bullish, as it recovered back above al of its moving averages, which anyway lack directional strength. Technical indicators have lost their bullish strength, the Momentum around its 100 level and the RSI above its midline.

Gold might fail to break above 1813

Nov 05 2021