With the positive impact of the Fed’s policy stance on the USD remaining intact on Thursday, XAUUSD slumped to its lowest level since late September and came within a touching distance of the multi-year low set at $1,615 on September 28.

The improving market mood on renewed optimism about China easing coronavirus restrictions provided a boost to Gold price and opened the door for a decisive rebound. The US Dollar struggled to find demand as a safe haven and helped XAUUSD stretch higher toward $1,650 ahead of the October jobs report.

.Wall Street's main indexes opened decisively higher after this report and XAUUSD built on earlier gains to end the week on a firm footing above $1,660.

The Relative Strength Index (RSI) indicator on the daily chart climbed above 50 and Gold price closed above the 20-day Simple Moving Average (SMA) for the first time in two weeks on Friday, pointing to a bullish shift in the near-term technical outlook.

On the upside, $1,675 (static level, 50-day SMA) aligns as a key pivot level. In case buyers confirm that level as support, additional gains toward $1,700 and $1,720 (Fibonacci 23.6% retracement of the long-term downtrend, 100-day SMA) could be witnessed.

On the downside, the 20-day SMA forms the first support at $1,650 before $1,620 (end-point of downtrend) and $1,600 (psychological level).

Despite Friday's decisive rebound, experts don't seem to be convinced about gold price continuing to stretch higher in the near term. The average target on the one-week and one-month outlooks align at $1,639 and $1,653, respectively.

Next week’s Consumer Price Index (CPI) data could help Gold price determine its next short-term direction.

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Nov 06 2022