Gold Forecast: XAU/USD bounces back above $1,800 from a five-month low

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  • Gold prices trim daily losses as dollar soars on risk aversion.
  • US yields slump amid recession fears.
  • Silver also rebounded, down “only” 2.60%.

Metals rallied during the American session, amid a plunge in US yields. The rally in Treasuries boosted gold, which dragged silver higher. The XAU/USD around $1,800/oz, far from the daily low.

Falling Yields Help Gold, Silver

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Yields in the US soared lower. The US 10-year Treasury bond yield fell to 2.79%, the lowest level since late May (it traded above 3.00% as of early Friday), while the US Treasury bond yield at 30 years it fell to 3.02%.

The fear of recession is softening the expectations of the Fed’s adjustment. The bond market shows more concerns on Friday than the stock market. On Wall Street, the Dow Jones falls 0.56% and the Nasdaq 0.49%.

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The sharp drop in yields pushed gold back above $1,800, easing bearish pressure. XAU/USD bottomed at $1,784, the lowest since late January. It continues to drop on the day and is about to post the lowest weekly close in months. The zone around the 2022 low at $1,780 is critical support.

Silver also trimmed losses, dragged higher by gold. XAG/USD bottomed at $19.38, a level not seen since July 2020, and is trading at $19.75, down 2.60%. The price is below the 200-week simple moving average for the first time since May 2020.

Technical levels

XAU/USD

Panorama
Last Price Today 1807.84
Today’s Daily Change 0.54
Today’s Daily Change % 0.03
Today’s Daily Opening 1807.3
Trends
20 Daily SMA 1834.99
50 Daily SMA 1849.89
100 Daily SMA 1891.72
200 Daily SMA 1845.12
levels
Previous Daily High 1825.19
Previous Daily Minimum 1802.79
Previous Maximum Weekly 1847.95
Previous Weekly Minimum 1816.99
Monthly Prior Maximum 1879.26
Previous Monthly Minimum 1802.79
Daily Fibonacci 38.2% 1811.35
Daily Fibonacci 61.8% 1816.63
Daily Pivot Point S1 1798.33
Daily Pivot Point S2 1789.36
Daily Pivot Point S3 1775.93
Daily Pivot Point R1 1820.73
Daily Pivot Point R2 1834.16
Daily Pivot Point R3 1843.13

Source: Fx Street

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