Gold prices are struggling to break above the $4,200 mark during Monday’s Asian trading session. The precious metal is caught between a weakening US Dollar (USD) and easing geopolitical tensions, which have pushed Oil prices lower. Despite attempts to recover from last week’s low of $4,074, Gold lacks strong bullish momentum as the USD gains support from the Euro’s (EUR) broad weakness amid civil unrest across the European Union (EU).
Civil unrest in France, Portugal, and Italy has intensified, with France experiencing one of its most violent days of protests in years. At least 2,400 people were arrested, and public buildings were damaged. Italy’s Prime Minister, Giorgia Meloni, condemned the violence, stating that while demonstrating is a right, “setting our cities ablaze is not.” Meanwhile, falling US Treasury bond yields and Oil prices are limiting the USD’s upside, keeping Gold bulls hopeful.
US Federal Reserve (Fed) Chairman Kevin Warsh’s recent speech, scored 5.6/10 by FXS Speechtracker, suggested a cautious approach to interest rate hikes, with an October rate hike nearly priced out. Warsh acknowledged being “over-scarred” by the Global Financial Crisis and emphasized structural growth without rushing to pre-commit to future rate decisions. Additionally, Oil prices retreated after US President Donald Trump waived sanctions on Russian energy to support Ukraine peace talks, easing inflation fears.
Gold is also finding support from upbeat Chinese economic data, with the country’s GDP rising to 4.5% year-over-year in the third quarter, beating estimates. China’s Retail Sales and Industrial Production also exceeded expectations, which is significant as China is the world’s largest Gold consumer. Traders will closely monitor the civil crisis in Europe and USD movements, as the US economic calendar is light ahead of the Fed’s October 27-28 meeting.
Technically, Gold is trading at $4,176.14, facing resistance from key moving averages, including the 21-day SMA at $4,191. The 14-day Relative Strength Index (RSI) at 46 suggests subdued bullish momentum. Support is seen around $4,000, while resistance levels include the 100-day SMA at $4,239 and the 50-day SMA at $4,327.