#XAUUSD @ 1,768.82 Gold price has shifted its business below $1,770.00 as US Dollar Index sensed bumper demand on soured market sentiment. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• Gold price has shifted its business below $1,770.00 as US Dollar Index sensed bumper demand on soured market sentiment.
• The tight labor market and solid United States service sector have triggered signs of a rebound in inflation.
• Federal Reserve might decelerate the interest rate hike pace but will escalate guidance on interest rate peak.
• Gold price is declining towards the lower portion of the Rising Channel chart pattern around $1,760.00.

The pair currently trades last at 1768.82.

The previous day high was 1804.52 while the previous day low was 1778.55. The daily 38.2% Fib levels comes at 1788.47, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1794.6, expected to provide resistance.

Gold price (XAU/USD) has shifted its auction profile below the critical support of $1,770.0 in the early Asian session. The precious metal has been dragged below the cushion of $1,770.0 after surrendering the $1,780.00 support on Monday. Failing to climb above the ultimate resistance of $1,810.00 brought significant selling pressure on Gold price.

Soured market mood after the release of the stronger-than-projected US ISM Services PMI data triggered a sell-off in the risk-perceived currencies. Gold price faced immense pressure as upbeat service demand in the United States economy cemented expectations of a rebound in inflation. The risk aversion theme improved safe-haven’s appeal vigorously. The US Dollar Index (DXY) drove to 105.40 after registering a fresh five-month low at 104.10.

The risk aversion theme underpinned by the solid US service sector brought a stellar recovery in the returns from US Treasury bonds. The 10-YEAR us Treasury yields rebounded to near 3.59% after days of ignorance by the market participants.

Last week, upbeat US Nonfarm Payrolls (NFP) data cleared that labor demand is stellar led by strong demand from households. However, the market ignored the surprise rise in employment data and supported Gold price further. But now, the tight labor market in the United States economy has been followed by robust demand for the service sector. It is worth noting that a tight labor market and firmer service demand are catalysts that de-anchor short-term inflation expectations and carry the potential of ruining the recent drawdown in the October inflation report.

The US Services PMI has accelerated to 56.5, higher than the projections of 53.1 and the prior release of 54.4. Higher services PMI eventually demands more labor to augment the operations, which could incentivize firms to continue escalating prices for end use ahead.

Federal Reserve (Fed) chair Jerome Powell is putting his blood and sweat into triggering a slowdown in the United States economy to phase out extra inflation apart from the targeted one. The Federal Reserve has already announced four consecutive 75 basis points (bps) rate hikes to achieve price stability as early as possible. This time, the Federal Reserve policymakers were planning to decelerate the interest rate hike pace as their agenda is to trim inflation without crashing the economy.

No doubt, additional requirements for labor to augment overall robust demand will delight the Federal Reserve in hiking interest rates but rates have reached sufficiently higher to curtail inflation. Therefore, the novel robust demand has created havoc for the Federal Reserve policymakers.

The minutes from Federal Open Market Committee (FOMC) indicated that Federal Reserve policymakers favored a slowdown in the current pace adopted for an interest rate hike from December monetary policy meeting. The reasoning behind the small rate hike was to reduce financial risks and to observe the progress made from efforts by Federal Reserve in bringing price stability. A fresh increment in overall demand has renewed fears of hawkish Federal Reserve bets but various policymakers still favor a higher interest rate peak rather than calling a recession by passing a bigger rate hike judgment.

Chicago Fed President Charles Evans said on Friday, “We are probably going to have a slightly higher peak to Fed policy rate even as we slow pace of rate hikes,” as reported by Reuters.

Gold price is declining towards the lower portion of the Rising Channel chart pattern plotted on an hourly scale. A bear cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at $1,791.25, adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1770.08 at the time of writing. Pair opened at 1797.48 and is trading with a change of -1.52 % .

The pair is trading above its 20 Daily moving average @ 1752.58, above its 50 Daily moving average @ 1697.48 , above its 100 Daily moving average @ 1714.54 and below its 200 Daily moving average @ 1795.75

The previous day high was 1804.52 while the previous day low was 1778.55. The daily 38.2% Fib levels comes at 1788.47, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1794.6, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1782.51, 1767.55, 1756.54
• Pivot resistance is noted at 1808.48, 1819.49, 1834.45

[/s2If]
Join Our Telegram Group