XAU/USD Extends its 3-Month Highs but Remains Overbought
XAU/USD Analysis
The precious metal is running a relief rally of more than 8% in November, in its first profitable month since March, while last week was the best of 2022. This is largely fueled by the demise of the US Dollar, as markets expectations around the Fed's tightening path eased, after last week's soft CPI report.
XAU/USD has moved above the 200Days EMA and extends its three-month highs today, bringing the 1,808-14 region in its crosshairs, although further advance that would challenge the June highs (1.880) looks like a stretch for now.
On the other hand, the Relative Strength Index (RSI) has been hovering around overbought conditions for a few days now. Such conditions have sparked declines in the recent past and could lead to fresh pressure towards 1,729-1,710, but XAU/USD seems well protected under this region. Daily closes below the EMA200 (at around 1685) would shift near-term bias back to the downside.
On a fundamental level, the US Fed has been preparing market for a moderation in the pace of rate hikes, but Chair Powell has ruled out any pause and pointed to a higher terminal rate than previously expected [1]. Furthermore, policy makers will have two more inflation reports before their next decision in mid-December, making any pivot talk premature.
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. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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