Gold Price Recovery Keeps RSI Above Oversold Zone
The price of gold extends the recovery from the start of the week to keep the Relative Strength Index (RSI) above 30.
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Gold Price Outlook: XAU/USD
The price of gold extends the recovery from the start of the week to keep the Relative Strength Index (RSI) above 30, and bullion may attempt to further retrace the decline from the monthly high ($2762) as the oscillator moves away from oversold territory.
Gold Price Recovery Keeps RSI Above Oversold Zone
The price of gold trades to a fresh weekly high ($2640) as it starts to carve a series of higher highs and lows, with bullion approaching the 50-Day SMA ($2656) after closing below the moving average for the first time since July.
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In turn, bullion may reestablish the bullish trend from earlier this year should it trade back above the moving average, but the price of gold may consolidate over the coming days if it no longer responds to the positive slope in the indicator.
With that said, the recent rebound in the precious metal may unravel should it struggle to retrace the decline following the US election, and the price of gold may face range bound conditions over the remainder of the month as the Federal Reserve insists that ‘in the near term, the election will have no effects on our policy decisions.’
XAU/USD Price Chart – Daily
Chart Prepared by David Song, Strategist; XAU/USD on TradingView
- The price of gold starts to carve a bullish price series following the failed attempt to close below $2550 (61.8% Fibonacci extension), with a close above the $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) region opening up $2730 (100% Fibonacci extension).
- A breach above the monthly high ($2762) raises the scope for the test of the yearly high ($2790) but the price of gold may no longer track the positive slope in the 50-Day SMA ($2656) should it struggle to trade back above the moving average.
- Failure to break/close above the $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) region may push the price of gold back towards $2590 (100% Fibonacci extension), with a move below $2550 (61.8% Fibonacci extension) bringing the monthly low ($2537) on the radar.
Additional Market Outlooks
US Dollar Forecast: EUR/USD Rebound Pulls RSI Out of Oversold Zone
USD/JPY Rebounds as BoJ Ueda Pledges to Support Economic Activity
Canadian Dollar Forecast: USD/CAD Rally Clears 2022 High
US Dollar Forecast: AUD/USD Halts Bearish Price Series
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
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