#XAUUSD @ 1673.85 A pullback of the US dollar boosts gold toward $1680. (Pivot Orderbook analysis)

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• A pullback of the US dollar boosts gold toward $1680.
• Reversal offers hope for XAU/USD bulls.
• Dollar still remains firm ahead of the FOMC meeting.

The pair currently trades last at 1673.85.

The previous day high was 1698.49 while the previous day low was 1660.39. The daily 38.2% Fib levels comes at 1674.94, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1683.94, expected to provide resistance.

After the University of Michigan’s report showed a decline in inflation expectations, the dollar and US yields pulled back triggering a rebound in gold that recovered from multi-month lows toward $1680.

XAU/USD broke above $1670 and climbed to $1680, hitting a fresh daily high. It is still holding an important weekly loss and the lowest close since April 2020 but the rebound could favor a short-term reversal. Gold faces a strong resistance area between $1680 and $1695.

The main trend is bearish and currently gold is hovering around $1673, where the 200-week Simple Moving Average stands.

The sharp rebound in gold took place after the September preliminary University of Michigan’s Consumer Sentiment report showed a decline in medium and long-term inflation expectations. The main index recovered from 58.2 in August to 59.2 in September, below the market consensus of 60.

The report triggered a decline in Treasuries and also weight on the greenback that turned negative. The DXY fell to 109.50 down from 110.25. The 2-year yield pulled back from the highest since 2007 at 3.92% to 3.88% and the 10-year from 3.49% to as low as 3.42%.

Gold benefit a staged a sharp rebound. Also silver turned positive with XAG/USD rising toward $19.50. Silver is headed toward a modest weekly gain.

The FOMC meeting next week is critical for gold prices. The central bank is expected to raise rates by 75 basis points and to keep a hawkish tone with inflation as the main concern; all factors that have been supporting the dollar and keeping metals under pressure.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1673.97 at the time of writing. Pair opened at 1664.94 and is trading with a change of 0.54 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1720.43, 50 SMA 1738.61, 100 SMA @ 1787.72 and 200 SMA @ 1831.83.

The previous day high was 1698.49 while the previous day low was 1660.39. The daily 38.2% Fib levels comes at 1674.94, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1683.94, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1650.72, 1636.51, 1612.62
• Pivot resistance is noted at 1688.82, 1712.71, 1726.92

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