Gold Price Forecast: XAU/USD falls below $1,800 to lowest level since late January

• Gold attracts fresh selling on Monday and falls to its lowest level since late January.
• Signs of stability in financial markets weigh on demand for the yellow metal as a safe haven.
• The break below $1,800 accelerates the decline and paves the way for further losses.

The price of Gold (XAU/USD) has weakened further below the $1,800 level and has fallen to its lowest level since late January, at $1,786, during the first half of the European session on Monday. At time of writing, price bounces sharply towards $1,806, still down 0.30% on the day.

After an initial rally to the $1,818 area, XAUUSD came under further selling pressure on Monday and continued its recent bearish move seen over the past month. The modest recovery in global risk sentiment, as the signs of stability in the stock markets show, turned out to be a key factor weighing on gold as a safe haven.

In addition, the prospects for more aggressive tightening of Federal Reserve monetary policy they contributed to move away the flows of the yellow metal, which does not yield. The intraday drop was carried ahead some short-term stop orders sitting near the $1,800 level. This further aggravated the bearish pressure around gold, although a combination of factors helped limit losses.

The growing concern about global growth, stemming from the war in Ukraine and China’s zero-covid policy, has spurred a rally in bonds, pushing benchmark 10-year yields back from a recent high of 3.20%. This, in turn, kept dollar bulls on the defensive and offered some support to the precious metaldenominated in dollars, allowing spot prices to rebound from the $1,787 – $1,785 zone.

Nevertheless, lack of a strong continuation of buying and acceptance below the round $1,800 level marks a bearish breakout. Therefore, a further decline towards the $1,782-1,780 zone, or the 2022 low, on the way to the next relevant support near the $1,753-1,751 zone, remains a distinct possibility. Investors are now awaiting the release of the US Empire State Manufacturing Index for a further boost.

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