Gold price on the XAUUSD pair maintained the bullish push that has extended into the 3rd day, taking it to one-month highs on the back of more aggressive selling on the greenback.
The USD was offered heavily on Thursday after the FOMC statement yesterday indicated the bank’s willingness to use all available tools in its disposal to support the US economy. The markets interpret this to mean further massive monetary stimulus, even as the US Congress is expected to provide additional fiscal stimulus in the coming year.
The only factor capping the gold price move is the expected global recovery that could follow the containment of the coronavirus pandemic via mass vaccinations. Gold price is up 1.39% presently.
Technical Levels to Watch
Gold price (XAUUSD) has surged above the 1881.99 resistance and is now pushing towards the psychological resistance at 1900.76. This move is subject to time/price filter confirmation. If confirmed, the higher high needed to complement the higher lows of 30 November and 15 December and re-establish the upside move be in place. Traders would now look for a break of 1900.76 to target a move to 1918.68, and possibly 1950.15 or 1954.77, in that order.
On the flip side, a rejection at 1900.76 or failure to confirm the breakout of gold price at 1881.99 could stall this recovery, opening an opportunity for sellers to drive prices towards 1821.55 and 1800.34, en route to a retest of the 1762.51 support seen on 30 November.
A breakdown of the 1762.51 support creates a new lower low, which would instigate a resumption of the downtrend move that commenced on 7 August and stalled at the 30 November candle.
XAUUSD Daily Chart