The price of gold (XAU/USD) on Tuesday spiked to top $1,482 for the first time in over three weeks but later trimmed those gains to settle at around $1,476. The price of the yellow metal was trading within a consolidative triangle formation before breaking out on Tuesday but now appears to be facing strong trendline resistance just around the $1,480 level.
The gold price has now drifted into overbought levels of the RSI indicator in the 60-min chart, and this could be what triggered the late pullback. Traders now will be looking to the fundamentals for more guidance on the next stop.
Gold Price Fundamentals Overview
Gold is trading at the back of another Trump tweet which sent stocks spiraling late on Tuesday despite the highly vocal Statesman saying that things are progressing well with China. In the tweet, Trump said that the US-China trade talks could drag on to next year, until after the elections. All major US Indexes lost points in the final hours of trading to end the day below yesterday’s close.
The yellow metal is also trading at the back of another period of mixed economic data from the US. On Monday, the US Markit Manufacturing PMI beat the expectation of 52.2 with 52.6 while but the all-important ISM Manufacturing PMI missed by a landslide coming in at 48.1 versus the expectation of 49.2.
On the other hand, ISM Prices apid missed narrowly with 46.7 versus 47 while construction spending for October was way off the market after posting (MoM) change of -0.8% versus an expectation of 0.4%. Traders will be looking forward to Friday’s non-farm payrolls for guidance on the next move.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the price of gold appears to be experiencing a short-term bullish burst following Tuesday’s spike which began with a breakout. The gold price has since ventured into the overbought territory of the RSI indicator in the 60-min chart thereby sparking the late pullback.
Therefore, the bulls will be targeting the next rebound $1,482, $1,489 or higher at $1,495 going into Wednesday. On the other hand, the bears will hope that the pullback can continue towards $1,467, $1,460, or lower at $1,453.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the price of gold appears to be still trading under considerable bearish pressure despite today’s bullish breakout. The price of the yellow metal faces strong resistance just below the current level of the 100-day SMA at around $1,480 while support can be found at $1,450.
Therefore, the bears will be targeting long-term profits at around $1,450, $1,437, $1,415 or lower ay $1,400 going into the mid-week. On the other hand, the bulls will look to pounce for profits at around $1,492, $1,519, $1,536 or higher at $1,557.