- Summary:
- Gold price rose to new all-time highs on Thursday with strong fundamentals, but needs a stronger safe haven demand to protect gains.
Gold rose to a new record high price of $2,696 per ounce on Thursday, propelled by soft US macroeconomic data and escalation of war rhetoric in the Middle East. The commodity has been on a steady ascent since October 10, and has risen by 2.5 percent in the last five sessions. Non-yelding gold is also supported by the stagnation of US treasury bond yields.
The yellow metal’s upside looks far from over as the world’s two largest economies, the United States and China signal weak standing. In the United States, Initial Jobless Claims figures came in at 241k for the week ending October 10, matching analysts’ forecasts. However, the previous week’s figures were revised upward by 2k to 260k, signifying an underlying weakness in the labour market.
That said, Retail Sales picked up in the United States in September, showing ctrong consumption. Retail Sales rose by 0.3 percent to 0.4 percent month-over month, exceeding the forecast reading of 0.3 percent. That will add support to the US dollar put a lid on gold price. Meanwhile benchmark 10-year US treasury bonds are struggling to hold above the 4.0 percent yield level, and that is bullish for gold.
Also, China’s stimulus plan has failed to spur investor sentiment as previously thought, positioning gold for increased demand. The country Q3 GDP figures will be out later today, and could inject fresh volatility into XAUUSD.
Gold price forecast
On the hourly chart below, the momentum currently favours the buyers. The upside will likely prevail if the action stays above 2,686. Conversely, moving below that level will signal control by the sellers.
Resistance: The first resistance will likely come at 2,700, but a stronger upward momentum could enable a break above that mark to test the second resistance at 2,710.
Support: Initial support likely will likely come at 2,675, but a stronger downward momentum could breach that mark to invalidate the upside narrative. Meanwhile the downside could extend to test 2,665.
