Gold Price Forecast: Ceasefire discussions and a hawkish Powell weigh on gold
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UPGRADEXAUUSD Current price: $1,918.75
- Moscow and Kyiv are said to discuss a possible ceasefire in their second round of peace talks.
- US Federal Reserve chief Powell anticipated a series of rate hikes, starting with 25 bps in March.
- XAUUSD is in retreat mode as the mood improves, but bears remain cautious.
Gold prices are under mild pressure this Wednesday, with the bright metal trading near its daily low of $1,913.04 after peaking at $1,947.90 a troy ounce. The American dollar appreciated ever since the day started, backed by continued risk aversion amid the Russian war against Ukraine. The invasion continues, and the Kyiv government reported hundreds of civil casualties, while sanctions against Moscow keep piling up. The second round of talks was scheduled for this Wednesday, but at the time being, those have not started. Nevertheless, the Russian negotiator said that a ceasefire would be discussed at talks with the Ukrainian delegation.
Meanwhile, US Federal Reserve chief Jerome Powell is testifying before the US Congress. Powell has been quite hawkish so far, anticipating a 25 bps rate hike this month. However, he said that it's yet unclear how the war would affect the outlook for rates. Also, he repeated that the central bank's main goal is to achieve price stability one way or the other, announcing they may engage in a series of rate increases and let the balance sheet shrink.
Earlier in the day, the EU released the preliminary estimate of the February Consumer Price Index, which jumped to a record high of 5.8% YoY. European policymakers are also jawboning about a tighter monetary policy, bringing the issue back to the table. As a result, US government bond yields turned north, while Wall Street trims previous losses on relief. Demand for XAUUSD is in franc retreat, at least in the near term.
Gold Prices short-term technical outlook
The XAUUSD daily chart suggests that the ongoing slide could be just corrective. Technical indicators have pulled back modestly from extreme overbought readings, and are still holding well into positive levels without bearish strength. At the same time, gold keeps trading far above a bullish 20 SMA, which keeps advancing above the longer ones.
The near term picture hints at further declines. The pair is barely holding above a flat 20 SMA, while technical indicators head firmly lower, and are poised to pierce their midlines. The longer moving averages, however, head firmly higher, well below the current level. A slide through 1,912.00 should open the door for a steeper decline towards the 1,890 price zone.
Support levels: 1,912.00 1,903.40 1,890.90
Resistance levels: 1,926.60 1,938.10 1,952.20
XAUUSD Current price: $1,918.75
- Moscow and Kyiv are said to discuss a possible ceasefire in their second round of peace talks.
- US Federal Reserve chief Powell anticipated a series of rate hikes, starting with 25 bps in March.
- XAUUSD is in retreat mode as the mood improves, but bears remain cautious.
Gold prices are under mild pressure this Wednesday, with the bright metal trading near its daily low of $1,913.04 after peaking at $1,947.90 a troy ounce. The American dollar appreciated ever since the day started, backed by continued risk aversion amid the Russian war against Ukraine. The invasion continues, and the Kyiv government reported hundreds of civil casualties, while sanctions against Moscow keep piling up. The second round of talks was scheduled for this Wednesday, but at the time being, those have not started. Nevertheless, the Russian negotiator said that a ceasefire would be discussed at talks with the Ukrainian delegation.
Meanwhile, US Federal Reserve chief Jerome Powell is testifying before the US Congress. Powell has been quite hawkish so far, anticipating a 25 bps rate hike this month. However, he said that it's yet unclear how the war would affect the outlook for rates. Also, he repeated that the central bank's main goal is to achieve price stability one way or the other, announcing they may engage in a series of rate increases and let the balance sheet shrink.
Earlier in the day, the EU released the preliminary estimate of the February Consumer Price Index, which jumped to a record high of 5.8% YoY. European policymakers are also jawboning about a tighter monetary policy, bringing the issue back to the table. As a result, US government bond yields turned north, while Wall Street trims previous losses on relief. Demand for XAUUSD is in franc retreat, at least in the near term.
Gold Prices short-term technical outlook
The XAUUSD daily chart suggests that the ongoing slide could be just corrective. Technical indicators have pulled back modestly from extreme overbought readings, and are still holding well into positive levels without bearish strength. At the same time, gold keeps trading far above a bullish 20 SMA, which keeps advancing above the longer ones.
The near term picture hints at further declines. The pair is barely holding above a flat 20 SMA, while technical indicators head firmly lower, and are poised to pierce their midlines. The longer moving averages, however, head firmly higher, well below the current level. A slide through 1,912.00 should open the door for a steeper decline towards the 1,890 price zone.
Support levels: 1,912.00 1,903.40 1,890.90
Resistance levels: 1,926.60 1,938.10 1,952.20
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