Gold Steady Below Double Top Resistance $1,760 – Eyes on ISM Manufacturing PMI
Gold Steady, GOLD prices closed at $1753.55 after reaching a high of $1754.85 and a low of $1721.90. Gold reversed its course on Thursday and recovered its previous two sessions’ losses amid the weak U.S. dollar. It rose more than 2% on Thursday as the U.S. dollar was under pressure from the dismal U.S. weekly job numbers.
The U.S. Dollar Index reached its one-year highest level on Thursday at 94.5 during early trading hours, but the DXY faced resistance at this level and started declining and reached 94.1 during late trading hours. The U.S. Treasury yields on the benchmark 10-year note also fell on Thursday to 1.48%, supporting the yellow metal.
Gold Steady
Concerns about the labor market softening were raised after the number of Americans filing new claims for unemployment benefits increased by more than expected last week. It also contributed to uncertainty about Fed tapering because the Fed has set a strong job market as a criterion for announcing tapering.At 17:30 GMT, the quarter’s final GDP surged to 6.7% against the projected 6.6% and supported the U.S. dollar and further capped gains in gold prices on the data front. The U.S. unemployment claims from last week dropped to 362K against the forecast 333K and weighed on the U.S. dollar, which added further gains to the yellow metal. The Final GDP Price Index for the quarter remained flat with projections of 6.1%. At 18:45 GMT, the Chicago PMI for September also came in line with the forecasts of 64.7.
Meanwhile, Chicago Federal Reserve Bank President Charles Evans said that he believed the supply shocks pushing inflation up now would ease next year, and low-interest rates would still be needed to bring U.S. inflation back to 2%. He said that they should be patient and should not declare victory on inflation. These comments added further weight to the U.S. dollar and added gains in the yellow metal.
Furthermore, on Thursday, U.S. Federal Reserve President Jerome Powell promised to redouble efforts to find diverse candidates to replace two high-profile officials who resigned this week after criticism of their securities trading. He also added that the Fed has no plans to ban cryptocurrency.
Gold (XAU/USD) Technical Outlook – Trendline Resistance at $1,760
Gold was trading with a bearish bias at the 1,752 level on Friday, with immediate resistance at the 1,760 level. This resistance level is being extended by a downward trendline that we can see on the 2-hourly timeframe.
On the 2-hourly chart, gold has closed a Doji pattern, and as we know, it’s an indication of indecision among investors. Therefore, we can expect a slight bearish correction in gold prices.
Daily Technical Levels
Support Resistance
1728.69 1771.64
1703.82 1789.72
1685.74 1814.59
Pivot Point: 1746.77
On the lower side, gold’s immediate support prevails at 1,747 levels. A breakout below this level exposes the precious metal towards 1,735 levels. Further on the lower side, a breakout of 1,735 levels exposes the metal towards a 1,731 support level.
What happens if GOLD breaks above 1,760 resistance? The idea is that it’s going to head towards 1,773 and 1,784 resistance levels. Let’s consider taking sell trades below 1,760 and vice versa. Good luck!
