Gold Price Facing Many Hurdles Near $1,235

Key Highlights

• Gold price failed to surpass the $1,236 and $1,239 resistances and declined against the US Dollar.
• There is a key bearish trend line formed with resistance at $1,232 on the 4-hours chart of XAU/USD.
• The US Housing Price Index in Sep 2018 increased 0.2% (MoM), less than the +0.4% forecast.
• Today, the US Gross Domestic Product for Q3 2018 (Preliminary) will be released, which is forecasted to increase 3.5%.

Gold Price Technical Analysis

There was a decent upward move recently above the $1,220 and $1,230 levels in gold price against the US Dollar. However, the price failed to gain pace above the $1,236 and $1,239 resistances and later declined.

The 4-hour chart of XAU/USD indicates that the price topped near the $1,240 level once, and then at $1,239, $1,236, and finally near $1,230. The recent rally paused near the $1,230 and later the price declined below $1,225.

There was also a break below the 38.2% Fib retracement level of the last wave from the $1,119 low to $1,230 high. Since, the price broke the $1,217 support area and settled below the 100 simple moving average (red, 4-hours), there could be more losses towards $1,210.

An intermediate support is near $1,213 and the 61.8% Fib retracement level of the last wave from the $1,119 low to $1,230 high. On the upside, an initial resistance is near the $1,230 high.

More importantly, there is a key bearish trend line formed with resistance at $1,232 on the same chart. Finally, buyers need to push the price above $1,240 for a sustained upward move. If not, there is a risk of a downside move towards $1,213 and $1,210.

Looking at major pairs, EUR/USD failed to stay above 1.1350 and declined. Similarly, there was a downside break below the 1.2800 support in GBP/USD.

Economic Releases to Watch Today

• Germany’s GfK Consumer Confidence for Dec 2018 – Forecast 10.5, versus 10.6 previous.
• US Gross Domestic Product Q3 2018 (Preliminary) – Forecast 3.5% versus previous 3.5%.
• US Core Personal Consumption Expenditures for Q3 2018 (QoQ) (Preliminary) – Forecast +1.6%, versus +1.6% previous.
• Germany’s GfK Consumer Confidence for Dec 2018 – Forecast 10.5, versus 10.6 previous.