- Gold languished near a two-week low amid a good rally in equity markets.
- The weak USD price action extended some support to the metal.
- Investors seem reluctant to make aggressive bets ahead of the US NFP report.
Gold was depressed for a third day in a row on Friday and was last seen hovering around a two-week low, just below the $ 1,790 level during European morning. A slight improvement in global risk sentiment, as shown by a generally positive tone around equity markets, acted as a headwind for the XAU / USD safe haven. Aside from this, the hawkish outlook from the Fed was seen as another factor undermining the yellow metal. It’s worth remembering that minutes from the December FOMC meeting released on Wednesday showed that some policy makers want to tighten monetary policy faster to combat stubbornly high inflation.
Gold Technical Outlook
From a technical perspective, this week’s rejection near the $ 1,830-32 supply zone and subsequent decline may have already turned the bias in favor of bearish traders. Some follow-up selling below the horizontal support at $ 1,785 will reaffirm the negative outlook and set the stage for a further short-term depreciation move. Gold could accelerate the downward trajectory towards the intermediate support of $ 1,770-69 en route to the December 2021 low around the $ 1,753 region.
On the other hand, the $ 1,800 mark, coinciding with a technically significant 200-day SMA, now appears to act as immediate strong resistance. Sustained strength above that region could trigger a short hedging move and push gold prices towards resistance at $ 1,815. Some follow-up buying should allow the bulls to once again challenge a strong barrier near the $ 1,830-32 region.
Gold Daily Chart
Technical levels
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