The XAU/USD, or gold spot price, has experienced a 0.55% decrease, dropping to around $2030. This decline is accompanied by weakness in US yields, which may help limit the downward trend for the metal. Investors are now focused on the upcoming Friday release of US Personal Consumption Expenditures (PCE) figures from November, which are expected to be a key indicator of inflation and could impact the price of gold.
Despite the recent decline, the Relative Strength Index (RSI) remains in positive territory, and the Moving Average Convergence Divergence (MACD) histogram also indicates underlying buying pressure. However, the flat nature of the MACD histogram suggests a pause in momentum.
Looking at support and resistance levels, the 20, 100, and 200-day Simple Moving Averages (SMAs) indicate a bullish trend, with the price of gold remaining above these levels. Support levels to watch include $2020 (20-day SMA), $2000, and $1980, while resistance levels are at $2040, $2050, and $2070.
Additionally, the weakness in US Treasury bond yields has eased the opportunity cost of holding non-yielding metals like gold, which is contributing to the support for gold prices. As investors await the release of inflation data, the dynamics of the gold market may be set for the short term.
Insight:
It is important to keep an eye on the upcoming inflation data and its potential impact on the gold market. The interaction between US yields and the price of gold demonstrates the intricate relationship between economic indicators and precious metal prices. Additionally, the technical indicators and support/resistance levels provide valuable insights for traders and investors looking to navigate the current gold market.
