Gold Price Forecast: XAU/USD still under pressure below $1,850, flirts with 200-day SMA

  • Some continuation buying around the dollar drags gold prices lower for the second day in a row on Thursday.
  • Recession fears continue to weigh on investor sentiment and could support XAU/USD.
  • Investors await the US GDP report and other macroeconomic releases for a significant boost.

The price of gold (XAU/USD) has extended the previous day’s pullback from two-week highs and has seen selling for the second day in a row on Thursday. XAU/USD remains under pressure at the start of the European session and is trading now just above the important support of the 200-day SMA, near the $1,840 region.

The minutes of the FOMC meeting on May 3 and 4 showed that most participants believed that a 50 basis point rate hike would probably be appropriate in June and July. Aside from this, the worsening global economic outlook benefited the US dollar as the world’s reserve currency, which in turn weighed on dollar-denominated gold prices.

However, the fall seems supported in the midst of a weaker tone around stock markets, which tends to benefit gold as a safe haven. The prospects of more aggressive action by major central banks to curb inflation, along with the war between Russia and Ukrainehave fueled recession fears and continued to weigh on investor sentiment.

Risk aversion was reinforced by the recent decline in US Treasury bond yields. This could deter dollar bulls from opening aggressive positions and provide further support for non-yielding gold. Therefore, it will be prudent to wait for a strong continuation of selling before positioning for a resumption of the previous downtrend.

Market participants now await the US economic calendar, with the publication of the preliminary GDP of the first quarter, the usual weekly jobless claims and pending home sales. This, along with US bond yields, will influence the price dynamics of the dollar. Investors will follow signals from broader market risk sentiment to take advantage of short-term opportunities around gold.

gold technical levels

XAU/USD

Panorama
Last Price Today 1847.03
Today’s Daily Change -6.43
Today’s Daily Change % -0.35
Today’s Daily Opening 1853.46
Trends
20 Daily SMA 1853.08
50 Daily SMA 1904.01
100 Daily SMA 1885.84
200 Daily SMA 1839.21
levels
Previous Daily High 1868.13
Previous Daily Minimum 1840.85
Previous Maximum Weekly 1849.45
Previous Weekly Minimum 1786.94
Monthly Prior Maximum 1998.43
Previous Monthly Minimum 1872.24
Daily Fibonacci 38.2% 1851.27
Daily Fibonacci 61.8% 1857.71
Daily Pivot Point S1 1840.16
Daily Pivot Point S2 1826.87
Daily Pivot Point S3 1812.88
Daily Pivot Point R1 1867.44
Daily Pivot Point R2 1881.43
Daily Pivot Point R3 1894.72

Source: Fx Street

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