XAUUSD hovering above $1950.00

Gold bears are trying to bring XAUUSD below the three-week low at ~$1950 amid a moderate change of tone in the Middle Eastern conflict.

As the risk of a wider conflict dissipates, the more investors would potentially want to move away from safe-haven (and zero-yielding) assets such as gold.

At the time of writing, the world’s biggest gold-backed ETF (“SPDR”) has lost $759 million in value since Monday.

The persistent uncertainty regarding the future of the interest rates is also affecting the bullion.

• The Fed has recently communicated that it is unsure whether it has done enough to gradually bring the inflation down to the 2% target rate
   
• Any further momentum in country’s macroeconomic activity may potentially force the Fed to resort to interest hike once again

Despite the overall markets’ doubts in another interest rate hike this year, the Fed’s “higher-for-longer” mantra may indicate a prolonged period of pressure for gold.

On the technical side …

• In the short-term XAUUSD may test the $1950.00 support level again
   
• Further support levels are situated at 200-period (~1934.574) & 100-period (~$1927.228) SMA
   
• The relative strength index (RSI) is currently sitting at 51.94 (>70 – overbought, <30 – oversold), underlining the investor’s uncertainty towards both the conflict in the Middle East and Fed’s stance on the future interest rates

Pay attention to …

• US CPI reading next week (14.11.2023) may shed light on the Fed’s next policy steps.
  A higher-than-expected reading may indicate a need for another round of tightening.
  A lower-than-expected reading on another hand may prove that inflationary risks are gradually going down, thus potentially removing the need for another interest rate hike
   
• Other important macroeconomic announcements include initial jobless claims on Thursday, 16.11.2023