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Gold Price Forecast: XAU/USD Rises to 1-Week High, Needs Continuation Above $1,850

  • Gold rises to a one-week high on Friday amid a softer tone around the dollar.
  • Recession fears benefit the yellow metal as a safe haven.
  • A good recovery in stock markets and expectations of an aggressive Fed rate hike limit gains.

The price of gold (XAU/USD) it has extended the previous day’s bounce above the important 200-day SMA and has gained some traction on the last day of the week. XAU/USD holds firm at the start of the European session and moves close to the $1,850 regionat a new one-week high.

The US dollar weakened near two-week lows hit the previous day, amid the recent sharp decline in US Treasury bond yields. This, in turn, was seen as a key factor that extended some support to gold, denominated in dollars. Apart of this, Concerns over weakening global economic growth benefited safe-haven XAU/USD and helped the price of gold to recover further from the multi-month low reached earlier this week.

The markets continue concerned that more aggressive action by major central banks to curb inflation could challenge global economic growth. Additionally, the war between Russia and Ukraine and prolonged COVID-19 lockdowns in China have fueled recession fears. That said, a combination of factors could hold investors back from opening aggressively bullish positions in gold and limit any significant upside, at least for now.

Global risk sentiment recovered somewhat after the The People’s Bank of China (PBOC) will cut its prime rate on five-year loans by 15 basis points. to offset the economic slowdown. Aside from this, expectations that the Fed will maintain its tight monetary policy over the coming months to control inflation should cap gains for the underperforming yellow metal. However, gold remains on track to break a four-week losing streak.

In the absence of any major US economic releases, US bond yields will continue to influence dollar price dynamics. Aside from this, investors will take cues from broader market risk sentiment to take advantage of short-term opportunities around gold.

gold technical levels

XAU/USD

Panorama
Last Price Today 1844.19
Today’s Daily Change 2.29
Today’s Daily Change % 0.12
Today’s Daily Opening 1841.9
Trends
20 Daily SMA 1863.09
50 Daily SMA 1912.6
100 Daily SMA 1884.27
200 Daily SMA 1837.64
levels
Previous Daily High 1849.15
Previous Daily Minimum 1810.99
Previous Maximum Weekly 1885.82
Previous Weekly Minimum 1799.19
Monthly Prior Maximum 1998.43
Previous Monthly Minimum 1872.24
Daily Fibonacci 38.2% 1834.57
Daily Fibonacci 61.8% 1825.57
Daily Pivot Point S1 1818.88
Daily Pivot Point S2 1795.85
Daily Pivot Point S3 1780.72
Daily Pivot Point R1 1857.04
Daily Pivot Point R2 1872.17
Daily Pivot Point R3 1895.2

Source: Fx Street

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