September 30, 2022 02:59 AM ET
By: AnalysisWatch
The price of gold (XAU/USD) has risen for the fourth day in a row due to the depreciation of the U.S. dollar. However, quarterly positioning and hopes for economic stimulus from China, Japan, and the UK are additional catalysts that may have supported the yellow metal's correction from its low for the year, which stood at $1,667 at press time.
Higher yields and fears of a global economic slowdown, not to mention Russia and China's geopolitical problems, are keeping XAU/USD buyers on shaky ground, while upbeat U.S. data and aggressive central banking are likely to continue to depress metal prices. As a result, today's U.S. core Personal Consumption Expenditure (PCE) index for August, expected at 4.7% versus 4.6% and known as the Fed's preferred inflation indicator, will be important for clear guidance.
The technical Confluence Detector shows gold approaching key short-term hurdles to the north while holding beyond the strong support zone of $1,660-58, which includes the Fibonacci 38.2% one-week and the SMA10 one-day.
However, the $1,671 level, which encompasses the pivot point on day R1 and the 61.8% Fibonacci level on a weekly basis, seems to be an immediate challenge for XAU/USD buyers.
Thereafter, several levels between $1,678 and $80 could test metal buyers, with the resistance zone encompassing the previous year's low, the SMA100 on 4H, the pivot point on week R1 and the pivot point on month S1.
If gold rallies above $1,680, the bulls can target the $1,700 threshold.
On the other hand, a sustained trade below $1,658 will be needed to call back the gold sellers.
Failure to do so will see support at $1,650, the SMA50 on an hourly and 23.6% on a weekly basis.
If XAU/USD prices remain weak above $1,650, the $1,645 level, which encompasses the S2 pivot point on a one-month view, could serve as the buyers' last line of defense