The gold price on Friday plummeted to trade at a new 29-month low of about $1,639 before making a later recovery to settle at $1,643. The price of the yellow metal appears to be trading within a sharply descending channel formation in the 60-min chart.
As a result, the gold price has now plummeted to trade several levels below the 100-hour moving average line. However, Friday’s late pullback prevented the XAU/USD from descending deeper into the oversold conditions of the 14-hour RSI.
Gold Price Fundamentals Overview
From a fundamental perspective, the XAU/USD is trading at the back of a relatively busy period in the global markets. On Wednesday, the Federal Reserve raised the base interest rate by 75 basis points to 3.25%. On Thursday, the Swiss National Bank replicated the same raising its base interest rate from -0.25% to 0.5% while the Bank of England upped its base rate by 50 basis points to 2.25%, up from 1.75%. Canada’s retail sales data missed expectations on all counts while the EU’s preliminary PMI data was relatively disappointing.
On Friday, the US preliminary S&P Global Manufacturing PMI, the Services PMI and the Composite PMI all beat expectations. On Thursday, the initial jobless claims also came in better than expected with a claim count of 213k versus a forecast of 218k, while the continuing claims impressed with 1.379 million versus a forecasted figure of 1.4 million. Earlier in the week, the US housing starts for August came in better than expected whereas building permits failed to meet estimates.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the gold price seems to be trading within a sharply descending channel formation in the 60-min chart. This indicates a strong short-term bearish bias in the market sentiment.
Therefore, the bears will be looking to stretch the current declines toward $1,639 or lower to $1,630. On the other hand, the bulls will be targeting potential rebound profits at about $1,648 or higher at $1,656.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the XAU/USD appears to be trading within a descending channel formation. This indicates a significant long-term bearish bias in the market sentiment.
Therefore, the bears will be targeting long-term profits at about $1,608 or lower at $1,561. On the other hand, the bulls will look to pounce on rebounds at about $1,686 or higher at $1,732.