Gold Price Forecast: XAU/USD Makes a Solid Rebound to $1,680

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  • A pullback in the US dollar pushes gold towards $1,680.
  • The pullback offers XAU/USD bulls hope.
  • The dollar remains firm ahead of the FOMC meeting.

After the University of Michigan report showed a decline in inflation expectations, the dollar and US yields retreated causing a rebound in gold that recovered from multi-month lows towards $1,680.

XAU/USD broke above $1,670 and rose to $1,680, hitting a new daily high. It still maintains a significant weekly loss and the lowest close since April 2020, but the rebound could favor a short-term reversal. Gold is facing a strong resistance zone between $1,680 and $1,695.

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The main trend is down and gold is currently hovering around $1,673 where the 200 week Simple Moving Average is.

Gold’s sharp rebound came after the University of Michigan’s September flash report on consumer sentiment showed a decline in medium- and long-term inflation expectations. The main index went from 58.2 in August to 59.2 in September, below the market consensus of 60.

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The report triggered a decline in Treasuries and also a weight in the USD that turned negative. DXY fell to 109.50 from 110.25. 2-year Treasury yields fell from the highest level since 2007 of 3.92% to 3.88%, and 10-year Treasury yields fell from 3.49% to 3.42%.

Gold benefited from a strong rebound. Silver also turned positive with XAG/USD rising towards $19.50. Silver is heading for a modest weekly gain.

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

Technical levels

XAU/USD

Panorama
Last Price Today 1673.13
Today’s Daily Change 8.19
Today’s Daily Change % 0.49
Today’s Daily Opening 1664.94
Trends
20 Daily SMA 1720.43
50 Daily SMA 1738.61
100 Daily SMA 1787.72
200 Daily SMA 1831.83
levels
Previous Daily High 1698.49
Previous Daily Minimum 1660.39
Previous Maximum Weekly 1729.57
Previous Weekly Minimum 1691.47
Monthly Prior Maximum 1807.93
Previous Monthly Minimum 1709.68
Daily Fibonacci 38.2% 1674.94
Daily Fibonacci 61.8% 1683.94
Daily Pivot Point S1 1650.72
Daily Pivot Point S2 1636.51
Daily Pivot Point S3 1612.62
Daily Pivot Point R1 1688.82
Daily Pivot Point R2 1712.71
Daily Pivot Point R3 1726.92

Source: Fx Street

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