For context, the XAU/USD pair has been on an absolute tear of late. It’s done a good job of holding onto those gains, staying above the $3,300 level. Continuing to build on this momentum in the most recent trading session, gold hit a new one-week high of $3,320.70. Picture this—that same US dollar has really dropped in value. This dramatic decline has increased the attractiveness for gold, strengthening its appeal as a popular alternative investment.
On the daily chart, XAU/USD shows bullish momentum clearly. This rapid rise has brought it above its 20 Simple Moving Average (SMA), which currently serves as an important support line circling $3,289.20. The pair reached a high of $3,320.70. Following this, it retraced a little bit back to the $3,310 price area upon the opening of Wall Street exposing a little bit of market volatility. According to analysts, the market is still primed for further weekly gains continuation.
The overall XAU/USD outlook remains bullish with price action coiling above all MA’s. The 20 SMA continues to rise. Its price remains anchored above the more flat 100 and 200 SMAs indicative of strong bullish market sentiment. This diminished technical configuration bodes well for gold to continue to be pressured high in the sessions ahead.
The Momentum indicator has kept a phenomenon bullish slope, staying above its 100 level for XAU/USD. The Relative Strength Index (RSI) has found a base just above the 54 level. For a while now, it has been bouncing around the midpoint of 64, meaning the asset isn’t really considered overbought or oversold at this time.
XAU/USD support is now set at $3,289.20, $3,271.55, and $3,252.40. On the other hand, resistance levels are found at $3,325.00, $3,342.95 and $3,358.40. These areas will be important for bulls and bears as they try to steer the price in either direction over the next several days.
Market analysts are eagerly observing these developments. They’re forecasting what recent economic developments might mean for gold’s performance. Even as US dollar weakness persists and global inflation worries mount, the Fed’s latest move signals a more cautious approach. All totaled, there are multiple variables signaling that gold will continue to gain favor among investors looking to hedge against economic malaise.