Gold prices partially reversed Wednesday's pullback in early trading on Thursday. Gold buyers gained support from the pause in the US dollar's rally. The gold price will seek further trading momentum from the upcoming US PMI data.
At 21:45 Beijing time on Thursday, S&P Global will release the flash estimate of the US Purchasing Managers' Index (PMI) for October.
An authoritative media survey indicates that the flash estimate for the US manufacturing PMI in October is expected to rise from 47.3 to 47.5, while the flash estimate for the services PMI is expected to decline from 55.2 to 55.0.
Analysts point out that if the PMI data is stronger than expected, this could drive a rebound in the US dollar and hit gold prices; on the other hand, if the data falls short of expectations, the direct reaction could put pressure on the US dollar, thereby driving gold prices to strengthen further.
At the same time, market nervousness ahead of important US earnings reports will also play a role in driving gold price sentiment. Due to the US election on November 5th and ongoing conflicts in the Middle East, buyers may encounter new safe-haven demand for gold, so any potential gold price decline could be bought.
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How will gold prices trend?
As gold prices break through the resistance level of $2,723 per ounce, gold buyers may target the psychological level of $2,750 per ounce. Once this level is breached, the historical high of $2,759 per ounce will become the next target for buyers.
Looking at the gold daily chart, the 14-day Relative Strength Index (RSI) is flat but well above the 50 level, currently trading near 65.60, suggesting a strong upward momentum.
On the other hand, if gold sellers return, the 38.2% Fibonacci level from the October 10th low of $2,604 per ounce to the historical high of $2,759 per ounce will come to the rescue for buyers.
If gold prices continue to fall below $2,700 per ounce, the 50% Fibonacci support level of $2,682 per ounce will be tested. The bottom line for gold buyers is the 21-day Simple Moving Average (SMA) at $2,670 per ounce.