Gold Starts Q4 on the Front Foot After Last Quarter’s Plunge


XAU/USD Analysis

The precious metal makes kicked-off the new quarter on the offensive, capitalizing on last week's rebound from the lowest level since April 2020 and the height of the pandemic. This is largely due to recent USDollar weakness, as recession fears have led to a moderation of market expectations around the Fed's next rate moves.

At the time of writing, CME's FedWatch Tool still prices in a 75 basis points increase next month, but with a lower sub-60% probability, whereas expectations for December are roughly split between 25 and 50bps hike. [1]

This has allowed XAU/USD to enter its second straight profitable week, having closed Monday above the EMA200 (black line) and covering around half of its drop from the August highs to September lows. This brings the descending trendline from the summer highs in its eyesight (at around 1,740).

However, the upside seems well protected, as the daily Ichimoku Cloud and the 200Days EMA follow, and we are still cautious around the ascending prospects.

Despite recent USD deflation, the Fed remains committed to its hawkish policy and singularly focused to bringing inflation down and it is hard to see sustained greenback weakness if that does not change.

Trade the News: View our Economic Calendar

Furthermore, the Relative Strength index hit the highest level since late July, which had eventually led to the last leg lower over the last two month and the 2+ year lows. As such, XAU/USD is vulnerable to renewed pressure back below 1,659, but sub-1,608 don't seem easy in the near-term.

Moreover, XAU/USD comes from a six-month losing streak, while the recent rebound is still nascent and could be just a typical pullback to the bearish Double-Tops formation, which we have highlighted in previous articles.

Nikos Tzabouras

Senior Financial Editorial Writer

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.



Retrieved 21 May 2024

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.