Gold Price Forecast: Bears keeping XAUUSD in check

XAUUSD Current price: $1,711.01

• The European Central Bank failed to impress, helping the greenback.
• US Treasury yields eased from their early peaks but still hint at recession.
• XAUUSD has managed to recover from a fresh 2022 low but lacks follow-through.

Gold price recovered from a fresh 2022 low of $1,680.82 a troy ounce and now trades in the $1,711 price zone. The dollar shined after the European Central Bank announced its monetary policy decision, which initially hit the greenback as policymakers hiked rates by 50 bps. However, the absence of clues about what’s coming up next discouraged bulls.

Meanwhile, market participants pay close attention to government bond yields, as recession fears remain the main theme. Treasury yields advanced throughout the first half of the day but receded after Wall Street’s opening, halting the dollar’s appreciation. XAUUSD retained gains above the $1,700 threshold.

Generally speaking, the market’s mood remains sour, with US indexes battling to retain the green amid encouraging earnings reports. Still, softer-than-anticipated US data will likely prevent them from rallying.

Gold price short-term technical outlook

From a technical point of view, the daily chart for XAUUSD hints at a bullish correction, although the risk remains skewed to the downside. Technical indicators are barely correcting extreme oversold conditions as the bright metal develops far below bearish moving averages.

In the near term, and according to the 4-hour chart, potential gains seem limited. Technical indicators have turned flat after reaching neutral readings, while the pair struggles around a mildly bearish 20 SMA. The 100 and 200 SMAs maintain their firmly bearish slopes far above the current level. Renewed selling pressure below $1,697.50 will likely result in a test of the aforementioned daily low.

Support levels: 1,697.50 1,689.90 1,680.80  

Resistance levels: 1,718.25 1,727.20 1,736.70

View Live Chart for the XAUUSD