- Gold prices remain steady despite weak Chinese data, Risk-Off Start to the week.
- Market uncertainty and geopolitical tensions are supporting gold’s safe-haven appeal.
- Key support and resistance levels to watch are identified.
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Gold prices held steady this morning as weak Chinese data renewed market concerns and led to a risk-off start to the week. The Chinese data is an interesting one where Gold is concerned, as the drop in exports could lead to fear that demand for Gold may fall from China while the risk-off mood benefits Gold thanks to its safe haven appeal. This dynamic highlights the interplay between economic indicators and market sentiment in influencing gold prices.
Therefore, following an initial drop at market open, Gold bulls managed to push prices back toward the Friday highs above the $2660/oz handle. Despite the likelihood of less aggressive rate cuts from the Federal Reserve, Gold continues to be favored as a safe-haven asset amid market uncertainties and geopolitical tensions.
Market participants are currently expecting less than 50 bps of rate cuts from the Fed by year-end, but Gold prices remain elevated due to prevailing global risks. The ongoing uncertainties surrounding Chinese growth and geopolitical dynamics are key factors driving the demand for safe-haven assets like Gold.
These factors create a sense of unease among investors, maintaining the appeal of Gold as a safe-haven asset in times of uncertainty.
Economic Data and Week Ahead
Today’s market activity may be affected by lower liquidity due to the US market holiday for Columbus Day, with the Dollar Index (DXY) likely to influence Gold price movements. Additionally, Federal Reserve policymakers’ comments, particularly from Waller and Kashkari, could impact Gold prices by reinforcing dovish sentiments.
With limited high-impact data releases from the US this week, Gold prices are expected to be guided by overall market sentiment, geopolitical developments, and Federal Reserve policymakers’ statements.
Technical Analysis Gold (XAU/USD)
From a technical standpoint, Gold surprised with last week’s rally to break above the psychological $2650 handle.
Analyzing the four-hour chart (H4) below, the recent candle closed as a shooting star, indicating possible downside momentum. However, the bullish long and medium-term trend in Gold suggests that any downside movement may be limited. The failure to surpass the all-time highs around $2685 from September 26 provides some resistance for further upward momentum.
Immediate support is seen at $2650, followed by the 100-day moving average and support level around $2643-2640. On the upside, resistance lies at $2670, $2685, and the psychological level of $2700.
GOLD (XAU/USD) Four-Hour (H4) Chart, October 14, 2024
Source: TradingView (click to enlarge)
Support
Resistance
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