Gold Spot Prices (XAUUSD) are enjoying a risk-on bullish session on Wednesday as the US debt talks stalemate raise gold as a potential safe haven, with some analysts’ labelling the non-yielding bullion as a possible “ultimate” safe haven. However, the bullion would need to navigate the clustered US economic calendar should it look to reclaim the heights reached earlier this month.
The market has sent the gold spots within a narrow trading range as it positions itself for the Fed member Waller’s speech and the FOMC meeting minutes due later today, with the US PCE data on the near horizon also weighing on investor appetite. Recent Fed member speeches have suggested that a potential tighter monetary policy path from the Fed could be warranted, and the speech and the FOMC could give a glimpse into a potential direction of precious yellow metal, which has nose-dived over 5% from the all-time high of $2078.37/ounce established earlier this month.
Technical
The daily chart shows that the non-yielding bullion has formed an ascending channel following the rejection of the major support level at $1614.82/ounce in early November 2022. The pattern suggests the market has been bullish towards the non-yielding bullion, helping it reach its all-time high of $2078.37/ounce earlier this month.
However, the 4H chart shows a conflicting view as the bullion has formed a descending channel pattern as the bulls continue to succumb to the bears’ dominance following the falter at the new all-time high. Therefore, the weekly pivot at $1983.89/ounce and the upper trendline of the descending channel could offer immediate resistance to the bulls’ rebound rally. A breakthrough above the upper trendline would bring the resistance level (R1) at $2015.86/ounce and the resistance level (R2) at $2052.85/ounce firmly into play.
However, should the bulls’ rally be short-lived, the bears could target the support level at $1945.64/ounce to confirm bearish momentum. The fall of $1945.64/ounce would bring the support level at the $1934.92/ounce price level and the lower trendline of the ascending channel into play. Breakthrough below the lower trendline could trigger a selloff lower, with the golden ratio at $1909.83/ounce offering significant support to the price action.
Summary
The bulls have enjoyed a hiatus from the bears’ clutches on Wednesday’s trading session. The bulls would need to sustainably break above the descending channel should they look to continue the major bullish trend. Bulls falter could boost the bears’ attempt to push the non-yielding bullion even further down, with the initial target being a close below the $1945.64/ounce for a further push below.
Sources: TradingView, Reuters.
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