Gold Price Forecast: XAU/EUR rallies for the third straight day, steady at around €1,570
- XAU/EUR extends its rally to a third-straight day, up some 0.27% during the New York session.
- XAU/EUR raised almost 4% since last week’s lowest low, as central banks pushed back higher rates.
- XAU/EUR: A break above €1,592 would open the door to fresh yearly highs.
XAU/EUR advances for the third consecutive day, extending its rally since Thursday of last week, up 0.27%, trading at €1,574.63 during the New York session at the time of writing. The market sentiment has been upbeat throughout the day, as witnessed by major US equity indices rising between 0.08% and 0.29%.
In the last week, some central banks of global developed economies held their monetary policy meetings for November. In the case of the Reserve Bank of Australia (RBA), the central bank decided to keep its interest rates unchanged at 0.10% while continuing its bond purchasing program at A$4 Billion a week until February 2022. Furthermore, it dropped the Yield Curve Control on the Australian April 2024 Government bond. Also, it pushed back the expectations of higher rates but moved its target to 2023, instead of 2024, according to previous monetary policy meetings.
In the US, the Federal Reserve will begin the bond taper process by the middle of November. Additionally, it maintained its interest rates unchanged and reiterated that the bond taper would not mean that rates would need to get higher. Moreover, it pushed back higher interest rates, thus propelling a switch of the money market participants, as most expected two rate hikes to just one by the end of 2022.
The Bank of England (BoE) disappointed investors in the UK, as the market expected a rate hike, as some BoE’s members expressed concerns about higher inflation. They added that supply constraints, chains disruption, and elevated petrol prices are to be blamed regarding inflationary pressures.
That said, as portrayed by the central banks’ summary, investors flew towards safe-haven assets, in turn propelling XAU/EUR prices higher, jumping from €1,518 to €1,577, as the market expects policymakers to stay put on their monetary policy stances.
XAU/EUR Price Forecast: Technical outlook
In the daily chart, the XAU/EUR is trading well above the daily moving averages (DMA’s), meaning that the yellow metal has an upward bias. Furthermore, the following solid resistance area would be the 2021 high at €1,592. A breach of the latter would open the door for fresh yearly highs, with 1600 as the next supply zone in line.
On the other hand, failure at the abovementioned would expose the June 6 high at €1,567, followed by the October 28 high at €1,535.