Gold Price Forecast: XAUUSD hits two-week low, near $1,815 ahead of central bank speakers
|- Gold remained on the defensive for the third straight day and dropped to a nearly two-week low.
- Modest USD strength was seen as a key factor that undermined the dollar-denominated metal.
- Recession fears, sliding US bond yields might help limit losses ahead of key central bank speakers.
Gold prolonged this week's rejection slide from the very important 200-day SMA and edged lower for the third successive day on Wednesday. The downtick dragged spot prices to a nearly two-week low, around the $1,816-$1,815 region during the early European session.
The overnight hawkish remarks by New York Fed President John Williams and San Francisco’s Mary Daly lifted bets for a faster policy tightening by the US central bank. This assisted the US dollar to build on the previous day's strong move up, which, in turn, undermined demand for the dollar-denominated gold.
Market participants, however, remain divided over the need for a more aggressive Fed rate hike amid growing recession fears. This, along with a fresh leg down in the US Treasury bond yields and the prevalent cautious market mood, could offer some support to the non-yielding yellow metal and help limit deeper losses.
Traders might also refrain from placing aggressive bets and prefer to move on the sidelines ahead of the key event risk. Fed Chair Jerome Powell, the Bank of England Governor Andrew Bailey and the European Central Bank President Christine Lagarde are due to speak at the ECB forum in Sintra, Portugal on Wednesday.
Investors will look for fresh clues about the central bank's tightening path, which will play a key role in driving gold price in the near term. Apart from this, the broader market risk sentiment, the US bond yields, and the USD price dynamics would help determine the next leg of a directional move for the XAUUSD.
Technical levels to watch
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