- The gold price registers a modest recovery from the eight-day low reached this Wednesday.
- Bets on sizable Fed rate hikes and a stronger US dollar limit XAU/USD gains.
- Investors eagerly await US labor market data and Powell’s remarks.
Gold price is rebounding from an eight-day low hit earlier this Wednesday and rallying to the $1,815 region during the first half of the European session. A meaningful recovery still seems difficult amid growing bets on more aggressive tightening by the Federal Reserve (Fed).
Aggressive expectations on the Federal Reserve limit the rises of Gold
In remarks prepared for his semiannual testimony to Congress, Fed Chairman Jerome Powell indicated Tuesday that interest rates may have to rise faster and higher than previously anticipated. Powell added that recent economic data from the United States (US) had been stronger than expected and that the Fed is willing to increase the pace of rate hikes to combat stubbornly high inflation. Markets were quick to react and began pricing in the possibility of a 50 basis point (bp) hike at the next Federal Open Market Committee (FOMC) monetary policy meeting later this month. This remains supportive of high US Treasury yields and should act as a headwind for the gold price.
Dollar strength could also hurt XAU/USD
Indeed, the yield on the benchmark 10-year US government bond is holding steady near the 4.0% threshold and the rate-sensitive two-year Treasury note is near its highest level since 2007. This , in turn, helps the dollar consolidate the previous day’s big rally and rally to a three-month high. A stronger dollar could also help to limit the rise in the price of gold. Therefore, it would be prudent to wait for strong follow-through buying before placing further bullish bets on XAU/USD and positioning for any further movement in gold. intraday appreciation. That being said, a softer risk tone overall could lend some support to the safe-haven precious metal and help limit the downside.
Waiting for the US labor market data and Powell’s statements for a new impetus
Market sentiment remains fragile on concerns over economic difficulties stemming from rapidly rising borrowing costs. Beyond this, hopes for a strong economic recovery in China and US-China tensions dampen investor appetite for riskier assets. Market participants now look to the US economic calendar, where the release of the ADP Private Sector Employment report and JOLTS data on job openings will be reported. This, along with Powell’s second day of remarks to Congress and US bond yields, will weigh on the dollar. Aside from this, the broader market risk sentiment should provide some lift to the gold price and allow traders to take advantage of short-term opportunities.
Gold Price Technical Outlook
From a technical perspective, the gold price is again attracting some buyers ahead of the 100-day SMA. Saying mediumcurrently set near the round figure of $1,800, should act as a pivot point, which if decisively broken will be seen as a new trigger for bears and set the stage for deeper losses. XAU/USD could then accelerate the decline towards a test of the next relevant support near the $1,775 horizontal zone.
On the other hand, the area between $1,818 and $1,820 could offer some resistance before the horizontal area of ​​$1,835. If it were to hold above the latter zone, a short recovery could ensue and the price of gold would reach the monthly high again, around the $1,858 zone touched last Friday. Below is the 50-day SMA barrier, currently near the $1,869 zone, which should stop any further rise, at least for now.
XAU/USD Technical Levels
XAU/USD
Panorama | |
---|---|
Last Price Today | 1814.23 |
Today’s Daily Change | 0.13 |
Today’s Daily Change % | 0.01 |
Today’s Daily Open | 1814.1 |
Trends | |
---|---|
20 Daily SMA | 1839.8 |
SMA of 50 Daily | 1869.64 |
SMA of 100 Daily | 1804.46 |
SMA of 200 Daily | 1775.32 |
levels | |
---|---|
Previous Daily High | 1851.73 |
Minimum Previous Daily | 1812.81 |
Previous Weekly High | 1856.35 |
Previous Weekly Minimum | 1804.76 |
Maximum Prior Monthly | 1959.8 |
Minimum Prior Monthly | 1804.76 |
Daily Fibonacci 38.2% | 1827.68 |
Daily Fibonacci 61.8% | 1836.86 |
Daily Pivot Point S1 | 1800.7 |
Daily Pivot Point S2 | 1787.29 |
Daily Pivot Point S3 | 1761.78 |
Daily Pivot Point R1 | 1839.62 |
Daily Pivot Point R2 | 1865.13 |
Daily Pivot Point R3 | 1878.54 |
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.