XAU/USD Outlook: Gold Is Set For Further Advance But Possibility

Technical analysis of Forex market

Spot gold extends advance into the sixth straight day on Thursday and pressuring new 5-month high ($1868), posted on Wednesday when metal’s price spiked after higher than expected us inflation data in October.

Rising consumer prices boost demand for gold as an inflation hedge, while a slowdown in the US and Chinese economies contributes to the positive sentiment that could push the price much higher.

Bullseye significant barriers at $1872/75 (weekly cloud top/50% retracement of $2074/$1676, Aug 2020/July 2021 correction), violation of which would unmask psychological $1900 level and May’s peak at $1916.

Bullish studies on daily and weekly charts support the action, which could be interrupted for consolidation due to overbought conditions, with dip-buying favored above the former top at $1834.

However, traders need to remain cautious, as surging inflation may prompt an earlier than expected rate hike that would weigh on yellow metal’s price.

Res: 1868, 1875, 1890, 1900.
Sup: 1842, 1834, 1822, 1813.