Gold Price Forecast: XAUUSD bulls attempt to move in, stabalising near USD sunken lows
|- Concerns regarding the newest Covid-19 outbreak in China and geopolitics dampened the market mood.
- Despite falling US Treasury yields, king dollar safe-haven flows weighed on Gold Prices.
- Gold Price Forecast (XAUUSD): Remains tilted to the upside, but a break below $1890-$1900 to open the door for a test of the 200-DMA.
The Gold Price is higher by some 0.18% and has moved back to challenge the $1,900 round number in recent trade. The US dollar is bid and capping the yellow metal despite the risk-off sentiment in markets. The greenback as measured by the DXY was up for a fourth straight day on Tuesday, smashing through to the highest level since March 2020, and is now up nearly 7% on the year.
A combination of risk-off themes are roiling markets this week, stemming from the Chinese lockdowns and negative implications for world trade at a time when NATO is on the brink of war with Russia. It is a 'sell-everything' day on Wall Street, with stocks in a sea of red. Meanwhile, data showed US Consumer Confidence edged lower in April. Additionally, the Atlanta Fed Gross Domestic Product nowcast estimate for the first quarter growth was revised sharply lower to 0.4% from 1.3% on April 19. The next update is on Wednesday, the final estimate before the Bureau of Economic Analysis releases its advance reading of Q1 GDP on Thursday.
China’s coronavirus outbreak, geopolitics, and a firm US dollar keep Gold Price downward pressured
Worries around China’s coronavirus outbreak maintain investors’ unease. Lockdowns in Shanghai and news of the spread to some districts of Beijing threaten to spur another raft of inflation courtesy of supply-side disruptions. Meanwhile, the People’s Bank of China (PBoC) continues to implement stimuli to the Chinese economy in its attempt to contain an economic slowdown.
In the meantime, the Russo-Ukraine tussles have taken a backseat of late. However, expressions by the Russian Foreign Ministry Lavrov saying that the risks of a nuclear war are “serious,” summed up the already dampened market mood.
Gold Price Forecast (XAUUSD): Technical outlook
Gold Price bias is still tilted to the upside, but a break below $1890 would clear the way for a fall at least to the 200-day moving average (DMA) at $1832.75, though a test to $1800 is on the cards. Something worth noting is that the RSI is at 39.23, in bearish territory and with enough room to spare before reaching oversold territory if XAUUSD bears like to drag prices lower.
If that scenario plays out, the XAUUSD first support would be $1900. Break below would expose the aforementioned $1890 support, followed by the 100-DMA at 1875.32, and then the 200-DMA at $1832.75.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.