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Gold Price Forecast: XAU/USD remains under pressure around the $1,810 region

  • Gold witnessed selling for the second day in a row on Wednesday amid modest dollar strength.
  • Expectations of an aggressive rate hike from the Fed and rising US bond yields helped the dollar stem its recent slide.
  • Recession fears weigh on investor sentiment and could support the yellow metal as a safe haven.

The price of gold (XAU/USD) moves lower for the second day in a row on Wednesday and extends the previous day’s rejection drop from the all-important 200-day SMA. XAU/USD remains on the defensive during the early hours of the European session, trading around the $1,810 area, down 0.30% on the day.

The appearance of some buying around the US dollar, bolstered by prospects of a more aggressive tightening of monetary policy by the Fed, turned out to be a key factor weighing on the price of gold, denominated in dollars. In fact, the markets seem convinced that the Fed would have to take more drastic measures to control inflation. Expectations were bolstered by upbeat US retail sales data and upbeat remarks from Fed Chairman Jerome Powell on Tuesday.

Speaking at a Wall Street Journal event, Powell said he will support interest rate hikes until prices begin to fall to a healthy level.. Markets were quick to react, as evidenced by some rebound in US Treasury yields. This further contributed to the selling tone around non-yielding gold, although concerns about weakening global growth could help limit deeper lossesat least for now.

Investors remain concerned about the possible economic repercussions of the war between Russia and Ukraine and the lockdown due to COVID-19 in China. The mixed fundamental backdrop warrants caution from aggressive investors, although the previous day’s failure near a technically significant moving average supports prospects for further losses. That said, it will be prudent to wait for a break below the $1,800 level before positioning for an extension of the one-month downtrend.

Market participants are now waiting for the US housing market data to gain some momentum. In addition, US bond yields will influence the dynamics of the dollar price. Investors will follow signs of broader market risk sentiment to take advantage of short-term opportunities around gold.

gold technical levels

XAU/USD

Panorama
Last Price Today 1809.81
Today’s Daily Change -5.45
Today’s Daily Change % -0.30
Today’s Daily Opening 1815.26
Trends
20 Daily SMA 1875.62
50 Daily SMA 1920.28
100 Daily SMA 1883.78
200 Daily SMA 1836.75
levels
Previous Daily High 1836.15
Previous Daily Minimum 1812.93
Previous Maximum Weekly 1885.82
Previous Weekly Minimum 1799.19
Monthly Prior Maximum 1998.43
Previous Monthly Minimum 1872.24
Daily Fibonacci 38.2% 1821.8
Daily Fibonacci 61.8% 1827.28
Daily Pivot Point S1 1806.74
Daily Pivot Point S2 1798.23
Daily Pivot Point S3 1783.52
Daily Pivot Point R1 1829.96
Daily Pivot Point R2 1844.67
Daily Pivot Point R3 1853.18

Source: Fx Street

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