XAU/USD, the symbol for the gold price in U.S. dollars, is currently riding a perfect storm of a market. Otherwise, it risks falling back down under its recent lows around the $3,880 level. Market sentiment changed dramatically once American markets opened. This in turn caused Wall Street to tank, an additional downward force. This has led to a massive increase in demand for the U.S. Dollar (USD) and has especially hurt other safe-haven assets such as gold.
According to new market data, XAU/USD had hit an intraday high of $4,019.66 early on in the day before starting to fizzle out. According to our 4-hour chart analysis, XAU/USD remains stuck below a climbing 200 Simple Moving Average (SMA) at $4,003. It is located well under a falling 100 SMA at $4,084. This technical positioning means that upward room looks like it will be relatively constrained in the near term.
The daily chart indicates that XAU/USD has broken more decisively below the 20-day SMA. Further adding to the bearish sentiment is the weakening of this moving average which is currently set at $4,084. The 100-day SMA at $3,608 and the 200-day SMA at $3,371 are positively angled. Their ongoing progress is both a complicating factor and supportive of the underlying upward trajectory for XAU/USD. Still, the existence of a bearish 20 SMA below these longer-term averages confirms that sellers remain firmly in control of the market.
Currently, the 20 SMA provides tenuous support for XAU/USD at $3,982. XAU/USD would have to begin closing regularly above the barrier of the 20-day SMA at $4,084. This is a critical move for it to get back on an upward trajectory. If this vital resistance isn’t reclaimed, the dangers tilt heavily to the downside. Support analysts are watching the truth on first, directly at $3,889. A break below this price could see the crypto falling deeper towards $3,608 and then to $3,371.
This downturn has been magnified by some recent bullish economic reports coming out of the United States. Then came the negative double whammy of the Challenger Job Cut report October’s 153,074 job cuts. This shocking number has rattled investor confidence in the resilience of the economy. This news has placed a significant burden on gold as a safe-haven asset, resulting in strong additional selling pressure.
Moreover, the momentum indicators for XAU/USD fail to offer a bullish reprieve to traders. The Momentum indicator is still well below the 100 line but has made some gains from its weekly low. As of today, it’s about right on the midline, reflecting a great deal of uncertainty among investors. Additionally, on the XAU/USD four-hour chart, the Relative Strength Index (RSI) recently fell below 50. This fall from all-time highs indicates that momentum may be starting to wane.
XAU/USD continues to trade around $3,980 price area. Latecomer investors are certainly looking at what these technical signals and economic data bodes for future price movements. Market sentiment continues to be tenuous as market participants balance downside risks to the outlook with upside prospects for a rebound.