Here is the XAUUSD update for today, November 1, 2023. Gold prices are experiencing a corrective decline for the third consecutive session early Wednesday after failing to hold above the $2,000 mark. This is due to the caution typically seen before the Federal Reserve (Fed) takes action in the financial markets. In this situation, the US Dollar (USD), a safe-haven asset, is receiving positive sentiment.
 
Market attention is also focused on US employment data, the US Treasury Department’s announcements, and the Fed’s decision. The USD is strengthening, supporting US Treasury bond yields despite risk sentiment uncertainty from factors like the contraction in China's Caixin Manufacturing PMI and the ongoing conflict between Israel and Hamas affecting oil prices.
 
In this context, the USD remains the safe-haven choice, and gold prices are declining to multi-day lows around $1,980. Additionally, rising US Treasury yields are impacting gold prices.
 
The US bond market is seeing declines ahead of the US Treasury’s announcement regarding refunds, including auction sizes and the maturity periods of issued debt.
 
However, the main focus remains on the US Federal Reserve’s interest rate decision. Fed Chair Jerome Powell’s remarks on interest rates, economic outlook, and inflation will influence the movement of the USD.
 
Moreover, economic data such as US ADP Employment Change, JOLTS Job Openings report, and ISM Manufacturing PMI data will also impact gold trading. Developments surrounding the Gaza-Israel conflict will also be significant factors affecting gold prices.
 
Gold initially received support after the World Gold Council (WGC) report showed increased central bank gold purchases, but this positive influence faded as the USD strengthened alongside US Treasury bond yields.
 
Technical analysis of gold prices indicates that the short-term outlook remains favorable for buyers. The "buy-on-dip" strategy will likely persist ahead of the Fed’s decision.
 
The 14-day Relative Strength Index (RSI) has returned to neutral territory, opening up further upside potential.
 
Additionally, support for this positive outlook comes from the 21-day Simple Moving Average (SMA) crossing above the 50-day SMA, forming a bullish cross, while the 21-day SMA has also moved above the 100-day SMA.
 
Therefore, if further declines occur, strong support is expected around $1,963, and if prices fall below that, the psychological level of $1,950 could be tested.
 
On the other hand, if gold buyers attempt to take control, the first resistance level is expected around $1,990, and if surpassed, the $2,000 level will be retested.
 
If gold prices reach the multi-month high of $2,009, this could initiate an uptrend potentially targeting the mid-May high around $2,020.
 
Disclaimer!
 
This is the explanation for "XAUUSD Today: November 1, 2023 - Gold Prices Correct." This analysis is based on fundamental and technical perspectives from trusted sources and is not advice or solicitation. Remember that this content aims to provide information. Always conduct your own research on other forex information as a reference for your trading.
 
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