Gold (XAU/USD) has opened the week on a mildly positive tone, favored by a moderate pullback on the US Dollar (USD) and the depressed US bond yields, which remain stuck at mid-term lows. The precious metal, which is hovering right above $2,020 remains buoyed by increasing hopes that the global tightening cycle has come to an end. The effect of hawkish comments by Federal Reserve (Fed) officials on Friday, downplaying monetary easing hopes, has been short-lived and the USD is drifting lower again at the week’s opening.
Investors are now looking for more cues about the timing of the central bank’s first rate cuts, with their eyes on the US Q3 GDP figures, due on Thursday, and Friday’s US Personal Consumption Expenditures (PCE) Prices Index. These releases are likely to boost US Dollar volatility and might help the precious metal to define its near-term direction. The technical picture shows the precious metal supported above $2,000, yet intraday charts show a lack of clear direction, with the hourly and 4-hour RSIs practically flat near the 50 midline.
Bulls are missing confidence to attempt a retest to previous highs at $2,040 in a calm trading session on Monday, with investors awaiting more data to place significant bets. The broader trend, however, remains positive from the early October lows near $1,800. On the upside, the precious metal should breach the $2,040-$2,050 to convince bulls and extend towards the $2,065 area ahead of the all-time high at $2,150. On the downside, Gold has important support at the $2,015-$2,020 area, where the confluence of the 50 and 100 SMAs in 4-hour charts meet the 50% Fibonacci Retracement of the October-December rally. Below here, bearish pressure would increase with the $1,977 support area coming into play.
