Gold Price Outlook Mired by Close Below 50-Day SMA

Gold Price Outlook: XAU/USD

The price of gold falls for the fourth consecutive day to register a fresh monthly low ($2578), and bullion may continue to give back the advance from the September low ($2472) as it no longer tracks the positive slope in the 50-Day SMA ($2650).

Gold Price Outlook Mired by Close Below 50-Day SMA

Keep in mind, the price of gold pushed below the October low ($2603) after closing below the moving average for the first time since July, with the recent weakness in the precious metal pushing the Relative Strength Index (RSI) to its lowest level since October 2023.

In turn, the RSI may show the bearish momentum gathering pace as it approaches oversold territory, with a move below 30 in the oscillator likely to be accompanied by a further decline in gold like the price action from last year.

With that said, the price of gold may continue to trade to fresh monthly lows as it carves a series of lower highs and lows, but failure to test the September low ($2472) may keep the RSI out of oversold territory.

XAU/USD Price Chart – Daily

Chart Prepared by David Song, Strategist; XAU/USD on TradingView

• The price of gold extends the weakness from the start of the month to take out the October low ($2603), with a break/close below $2550 (61.8% Fibonacci extension) opening up the $2480 (38.2% Fibonacci retracement) to $2500 (50% Fibonacci extension) region.
• Next area of interest comes in around the September low ($2472), but the Relative Strength Index (RSI) may show the bearish momentum abating should it struggle to push into oversold territory.
• Need a move back above $2630 (78.6% Fibonacci extension) for gold to snap the bearish prices series, with a close above $2730 (100% Fibonacci extension) bringing the monthly high ($2762) on the radar.

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--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong