Gold price (XAU/USD) attracts some dip-buying during the Asian session on Friday – marking the third successive day of a positive move – and draws support from steady safe-haven demand, fuelled by the Middle East conflict. Apart from this, subdued US Dollar (USD) price action turns out to be another factor underpinning the commodity. The precious metal, however, remains below a five-month peak touched last Friday in the wake of expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.
Traders also seem reluctant to place aggressive directional bets around the Gold price and prefer to wait on the sidelines ahead of the release of the Personal Consumption Expenditure (PCE) Price Index from the United States (US). The data will influence market expectations about the Fed’s policy move next week, which, in turn, will influence the USD price dynamics and provide some meaningful impetus to the non-yielding yellow metal. Nevertheless, the XAU/USD seems poised to register modest gains for the third straight week.
Technical Analysis: Gold price needs to break through the $2,000 mark for bulls to reaffirm near-term control
From a technical perspective, the Relative Strength Index (RSI) on the daily chart is hovering around the 70 mark. This suggests that the Gold price is nearing overbought territory and warrants some caution for bullish traders. Hence, any subsequent move up might continue to confront stiff resistance ahead of the $2,000 psychological mark. The said handle should act as a key pivotal point for short-term traders, which if cleared decisively should pave the way for a move towards the next relevant hurdle near the $2,022 area.
On the flip side, the $1,980 region is likely to protect the immediate downside ahead of the $1,972-$1,970 zone. A convincing break below the latter could drag the Gold price back towards the weekly low, around the $1,953-1,952 zone touched on Tuesday. Some follow-through selling could expose a technically significant 200-day Simple Moving Average (SMA) support, currently pegged near the $1,932-1,931 region.
Source: fxstreet.com
