Gold price is building onto Wednesday’s recovery in the lead-up to the European Central Bank (ECB) decision and the US Q3 GDP release. In the view of FXStreet’s Dhwani Mehta, risks appear skewed to the upside for XAU/USD.
Gold teases descending triangle on the 4H chart
“Investors turn cautious and seek shelter in the traditional safe-haven gold, awaiting the ECB outcome for clues on whether they would consider tightening monetary policy earlier than thought.”
“The US Q3 growth figures will provide fresh signs on economic recovery, with the country likely to grow 2.7% QoQ vs. a 6.7% jump seen previously.”
“Gold’s four-hour chart shows that the price has been teasing a descending triangle breakout, with a candlestick closing above the falling trendline resistance at $1803 awaited. If the upside breakout from the triangle materializes, then a fresh advance towards the weekly highs of $1810 cannot be ruled out. The next goal for gold bulls remains the pattern target measured at $1835, where the September month highs coincide.”
“The 21-Simple Moving Average (SMA) at $1798 will be the immediate cushion, below which the daily lows of $1794 could get retested. A sharp drop towards the bullish 50-SMA at $1787 will be on the cards if the latter caves in.”