Gold Price Forecast: $1,900 could be next key support as bears refuse to give in

The Gold Price correction from six-week highs of $1,998 gathered steam during the second half of the previous after Fed Chair Jerome Powell confirmed a 50-base hike for the May meeting while calling for front-loading rate rises. The aggressive Fed’s tightening expectations raised concerns over its negative impact on the American corporate sector and eventually on the economic performance. The market’s perception of risk sentiment turned negative on these risks, triggering ‘sell everything’ mode on Friday while bolstering the safe-haven bids for the US dollar. Gold Price, therefore, sank in tandem with the US stocks, reaching the lowest levels in 10 days at $1,927. The looming Russia-Ukraine risks and China covid concerns helped limit the losses in Gold Price, as it closed the week just above $1,930.

Gold Price is accelerating the bearish momentum this Monday to test the April lows of $1,915, as risk-off flows dominate alongside the dollar’s demand on the hawkish Fed bets. Fresh concerns over the spread of the covid outbreak to China’s capital Beijing and fears over a potential lockdown added to the dour mood. The bond market rout paused amid increased haven demand, weighing heavily on the Treasury yields. Although Gold Price has failed to capitalize on falling yields, thus far. Later in the day, the Fed expectations and the dollar’s price action will continue to have a significant impact on XAUUSD amid the Fed’s ‘blackout’ period and a lack of first-tier US economic data. Incoming Russia-Ukraine headlines will be eyed after Ukrainian President Volodymyr Zelenskyy met with US Secretary of State Blinken and Defense Secretary Austin on Sunday.

Gold Price Chart: Daily chart

Gold’s daily chart shows that bears are awaiting a sustained move below the April 15 lows of $1,915.

The bearish potential remains intact around XAUUSD after the price closed the week below the critical 21 and 50-Daily Moving Averages (DMA), currently at $1,943 and $1,937 respectively.

If sellers manage to gain a foothold below the $1,915 level, then a further sell-off to the $1,900 mark will be in the offing.

The next stop for bearish traders is envisioned at the March lows of $1,890.

The 14-day Relative Strength Index (RSI) is pointing lower below the central line, backing the case for further declines.

Alternatively, any recovery attempts are likely to meet the initial supply at 50-DMA, above which recapturing the 21-DMA will be critical for the additional upside.

The $1,950 psychological level will be the level to beat for gold bulls.