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Gold Price Forecast: XAU/USD Recaptures Losses Amid Dovish Fed Rhetoric, Eyeing $1,980 Resistance

  • Gold is up 1.12%, trading at $1,979.90, as US dollar strength subsides, with investors eyeing the $1,980 resistance level.
  • Statements from Fed Chairman Jerome Powell and US Treasury Secretary Janet Yellen rocked the market, sending XAU/USD rallying significantly.
  • XAU/USD remains on track for a 1.90% weekly loss after strong US retail sales and industrial production, as well as falling jobless claims, hint at possible US action. the fed.

Gold price rose more than 1% on Friday, paring some of the losses suffered during the week, as hawkish rhetoric from the Fed bolstered the dollar, which posted gains of 0.37%, according to the Dollar Index ( DXY). At the time of writing, the XAU/USD pair is trading at $1,979.90, up 1.12% daily.

XAU/USD Soars More Than 1% After Treasury Secretary’s Statements Cause Risk Aversion Momentum and USD Fall

The XAU/USD pair bottomed around $1,954.14 after Federal Reserve (Fed) Chairman Jerome Powell delivered a few words at a conference on Friday. Fed Chairman Jerome Powell noted that inflation is currently above the target level and underscores the Fed’s unwavering commitment to guiding inflation back toward the 2% target, saying “failure would do more damage.” In addition, Powell pointed to the strength of the banking system and suggested that tightening bank credit conditions could prevent a possible rate hike.

At the same time, a headline said CNN had reported that US Treasury Secretary Janet Yellen had told bank CEOs on Thursday that more mergers might be necessary after a series of of bank failures spurred a boost in risk appetite; hence XAU/USD soared strongly.

Discussions about the US debt ceiling came to a halt when the leader of the US House of Representatives, Kevin McCarthy, said. Instead, the White House commented that a deal remains possible.

Meanwhile, the Dollar Index (DXY), an indicator of the evolution of the dollar against a basket of six currencies, loses 0.30% and stands at 103.017, which seems to be profit-taking by traders facing To the weekend.

However, rising US Treasury yields halted the XAU/USD rally. The US 10-year yield lost two and a half basis points to 3,673%.

Although XAU/USD is paring some of its weekly losses, it is on track to lose 1.90% on the week after strong US retail sales, industrial production and falling jobless claims account for new actions by the Fed.

XAU/USD Price Analysis: Technical Perspective

XAU/USD Daily chart

After three consecutive days of bearish candlesticks, XAU/USD is forming a bullish engulfing candlestick pattern and is about to recapture the 50-day EMA at $1,977.38. Given the background, XAU/USD could resume its uptrend, but RSI in bearish territory may curb XAU/USD gains.

XAU/USD must achieve a daily close above $1980 for a bullish resumption. Risks to the upside lie at the 20-day EMA at $1,999, followed by the May 16 high of $2,018.28. On the other hand, the first support for XAU/USD would be the May 18 low at $1,951.87, followed by the 100-day EMA at $1,931.


Last price today 1983.03
daily change today 25.42
current daily variation 1.30
daily opening today 1957.61
daily SMA20 2004.89
daily SMA50 1984.74
daily SMA100 1927.28
Daily SMA200 1824.92
previous daily high 1986.04
previous daily low 1952.01
Previous Weekly High 2048.27
previous weekly low 2000.95
Previous Monthly High 2048.75
Previous monthly minimum 1949.83
Fibonacci daily 38.2 1965.01
Fibonacci 61.8% daily 1973.04
Daily Pivot Point S1 1944.4
Daily Pivot Point S2 1931.19
Daily Pivot Point S3 1910.37
Daily Pivot Point R1 1978.43
Daily Pivot Point R2 1999.25
Daily Pivot Point R3 2012.46

Source: Fx Street

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