XAU/USD - D1
Gold started the week on the back foot, but today it extends this month's advance, with gains of around 5%, rising to its highest level since June.
The yellow metal does not appear to be bothered by the US Dollar's rise during the same period, bolstered by last week's break above an important hurdle, which it had failed to surpass multiple times over the last few months.
This is the 38.2% Fibonacci of the drop from last year's record highs to the 2021 lows - at around 1,829-34 - and today it tries to take out the 50% level of the same move (1.876-8). A clear break above this level will open the door for the 1,900 round number and bring the summer highs (1,916) in its crosshairs.
Adding to the potential upside, a Golden Cross (DMA50 break above DMA200) has now formed. This is generally considered a solid indicator for moves higher, with its last occurrence in May, having led to the aforementioned summer highs.
On the other hand, current levels appear overbought, based on the RSI's readings and sustained Dollar strength could weigh on XAU/USD eventually, along with potential profit-taking. These factors could drive it back toward 1,850, with a bigger retreat to find the next support at 1,829-34.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.