Gold Price Forecast: XAU/USD sees modest gains amid US holiday
- Gold price edges up 0.14%, as US markets close for Thanksgiving, creating thin trading conditions.
- XAU/USD finds support from declining US Treasury yields, maintaining its position in the $1990-$2000 range.
- Upcoming S&P Global PMIs could provide further direction for Gold traders in a market assessing the Fed's tightening stance.
Gold price advanced moderately on Thursday due to thin liquidity conditions spurred by US markets remaining closed during Thanksgiving. At the time of writing, the XAU/USD is trading at $1992, gaining 0.14%, after hitting a daily low of $1989.56.
XAU/USD benefits from softer US Treasury yields and USD weakness, trading near the $2000 mark
European equities closed in the green, portraying a positive mood. A drop in US Treasury bond yields keeps XAU/USD underpinned after the US 10-year Treasury bond yield has fallen more than 6.20%, or 29 basis points, since the beginning of November.
XAU/USD broke above the $2000 mark on November 21; since then, the yellow metal has remained trading within the $1990-$2000 range.
The latest meeting minutes by the US Federal Reserve (Fed) failed to weigh on the bright metal, even though policymakers kept the door open for further tightening. Meanwhile, money market futures had priced in 85 basis points (bps) of rate cuts for the next year, the reason behind the sudden US Dollar (USD) weakness.
Since the Fed’s latest meeting on November 1, the Greenback has lost 2.76%, as the US Dollar Index (DXY) dropped from 106.67 to 103.78. However, in the last three days, buyers have entered the market and lifted the DXY above the 200-day moving average (DMA), which could pave the way to testing the 104.00 mark.
Ahead of the weekend, Gold traders would get some cues on the US economic docket, which would feature S&P Global PMIs, which are expected to post worse readings than the prior release.
XAU/USD Price Analysis: Technical outlook
Gold’s upward bias remains intact, though it’s subject to a pullback. Buyers' failure to keep prices above $2000 exacerbated a drop toward the week's low of $1965.57, below the 20-day moving average (DMA), but buyers lifted XAU/USD toward the current spot price. A breach of $2000, could put into play a test of the $2010 area, seen as next resistance, ahead of the April 23 high at $2048. On the other hand, if XAU/USD stays below $2000, the next support is seen at the 20-DMA at $1976.29.