Gold Forecast: XAU/USD consolidates weekly losses, remains under pressure near $1,800

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  • Gold’s recovery, capped by the $1,820 zone, remains under pressure.
  • The improvement in risk sentiment offers limited support to the yellow metal.
  • On a weekly basis, XAU/USD is down nearly 4%.

Gold bottomed at $1,799 on Friday, the lowest level since February. This was followed by a recovery that quickly found resistance at $1,820. The yellow metal remains under pressure.

Some risks come back, not for gold

Wall Street is rising strongly on Friday, in a recovery rally. In addition, crude oil prices are posting significant gains. US yields are flat and the dollar is correcting lower. Generally, that environment should be positive for gold. It only helped the metal stay above $1,800.

On the contrary, silver is staging a recovery back to the 21.00 zone and is positive on Friday with an increase of 1.50%, while on a weekly basis it is down almost 6%, about to register the lowest close since July 2020. .

Both metals remain under pressure in the current environment of higher interest rates, weaker growth prospects and financial stress. The technical outlook offers no improvement as the only positive is the extreme oversold readings on the technical indicators. There are no signs of a rebound or consolidation yet.

Gold is about to post a weekly drop of almost 4%, the second worst performance of the year and a close below the 20-week moving average for the first time since January.

“A prolonged weakening of the dollar does not seem likely in the current market environment. The factors that have been driving the dollar’s valuation, namely the ongoing Russia-Ukraine conflict, rising inflation fears amid lockdowns in China, and Fed tightening prospects, should remain intact next week. Therefore, it would be reasonable to expect gold’s recovery attempts to remain limited in the short term,” explained Eren Sengezer, analyst at FXStreet.

Technical levels

XAU/USD

Panorama
Last Price Today 1809.67
Today’s Daily Change -12.15
Today’s Daily Change % -0.67
Today’s Daily Opening 1821.82
Trends
20 Daily SMA 1898.2
50 Daily SMA 1929.29
100 Daily SMA 1883.58
200 Daily SMA 1835.98
levels
Previous Daily High 1858.9
Previous Daily Minimum 1821.38
Previous Maximum Weekly 1909.83
Previous Weekly Minimum 1850.44
Monthly Prior Maximum 1998.43
Previous Monthly Minimum 1872.24
Daily Fibonacci 38.2% 1835.71
Daily Fibonacci 61.8% 1844.57
Daily Pivot Point S1 1809.17
Daily Pivot Point S2 1796.51
Daily Pivot Point S3 1771.65
Daily Pivot Point R1 1846.69
Daily Pivot Point R2 1871.55
Daily Pivot Point R3 1884.21

Source: Fx Street

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