Gold prices (XAU/USD) fell slightly on Tuesday, driven by renewed dollar strength as well as robust yields, characterizing the reemerging decline of USD. On the other hand, the Nasdaq 100 also experienced a descent, dropping by 1.7% to 16,543, which marks its largest daily decrease since late October. This also reflects a longing over the substantial rally in U.S. Treasury yields.
Following the strong closure of the third quarter of 2023 for gold and the technology index, traders have chosen to adopt a cautious attitude at the beginning of the new year. This led to them trimming their exposure to both assets for fear of a larger pullback prior to noteworthy events anticipated in the coming days.
Looking ahead, on Wednesday, the release of the ISM manufacturing PMI is expected, followed by U.S. employment numbers on Friday. These reports provide an opportunity for Wall Street to evaluate the overall economic outlook and assess whether aggressive easing anticipations are warranted.
Gold Technical Analysis
Gold experienced a slight decline for the third consecutive time on Tuesday, after failing to break through a critical resistance positioned in the $2075-$2,085 region. In the near term, if vulnerable, support is likely to materialize in the $2,050-$2,045 range. It is essential for bulls to defend this floor dutifully. The failure to do so could trigger a sharp fall to $2,010, near the 50-day simple moving average.
Conversely, if buyers regain control and propel prices upwards, the initial line of defense against a bullish prosecution appears at $2075-$2,085. Nonetheless, previous attempts at penetrating through this ceiling have failed. Consequently, breakthrough is likely to follow, enabling a successful retest back to the all-time high level of $2,150.
Nasdaq 100 Technical Analysis
The Nasdaq 100 fell considerably on Tuesday, barely missing breaching a combined support near the 16,700 mark. To sustain bullish prospects for a new record, this technical floor should be prevented. The failure to do so may prompt a steeper downward movement, with the next area of interest located at 16,150.
However, if market sentiment stabilizes and facilitates a consistent recovery in the upcoming trading sessions, overhead resistance shifts attention to 17,165. It is possible that the Nasdaq 100 is poised to rise from this ceiling on retesting. Nonetheless, a breakout might facilitate a rally towards 17,500, a significant milestone for the tech index.
