Key Highlights
- Gold price is trading nicely above the key $1,550 support against the US Dollar.
- A major bullish trend line is forming with support near $1,561 on the 4-hours chart of XAU/USD.
- The US Durable Goods Orders increased 2.4% in Dec 2019, more than the +0.5% forecast.
- The US Pending Home Sales is likely to increase 0.5% in Dec 2019 (MoM).
Gold Price Technical Analysis
After forming a support base near the $1,540 level, gold price climbed higher above $1,565 against the US Dollar. The price traded towards the $1,590 level and it is currently correcting lower.
The 4-hours chart of XAU/USD indicates that the price traded as high as $1,588 and settled nicely above both the 100 simple moving average (red, 4-hours) and the 200 simple moving average (4-hours, green).
It is currently correcting lower below $1,585. There was a break below the 23.6% Fib retracement level of the upward move from the $1,546 low to $1,588 high.
On the downside, there are many supports, starting with $1,562. It coincides with the 50% Fib retracement level of the upward move from the $1,546 low to $1,588 high.
Moreover, there is a major bullish trend line forming with support near $1,561 on the same chart. Below the trend line support and the 100 SMA, the price might struggle to hold the $1,555 and $1,550 support levels. The next major support is near the $1,535 level.
On the upside, an initial resistance is near the $1,585 level. A successful break above the $1,585 and $1,588 levels could set the pace for a larger upward move towards $1,600 and $1,610.
Fundamentally, the US Durable Goods Orders report for Dec 2019 was released by the US Census Bureau. The market was looking for an increase of 0.5% in orders in Dec 2019, compared with the previous month.
The actual result was better than the forecast, the US Durable Goods Orders increased 2.4%. Looking at the Nondefense Capital Goods Orders Excluding Aircraft, there was a 0.9% decline whereas the market was looking for no change.
The report added:
Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders decreased 2.5 percent. Transportation equipment, up following three consecutive monthly decreases, drove the increase, $5.9 billion or 7.6 percent to $82.9 billion.
Overall, gold price is well supported for more gains as long as it is above $1,560. Looking at EUR/USD, the pair extended its decline below 1.1020 and GBP/USD tested the 1.3000 support.
Economic Releases to Watch Today
- Germany’s GfK Consumer Confidence for Feb 2019 – Forecast 9.6, versus 9.6 previous.
- US Pending Home Sales for Dec 2019 (MoM) – Forecast +0.5%, versus +1.2% previous.
