Gold Price Forecast: Bears looking for fresh 2022 lows under $1,700.00

XAUUSD Current price: $1,701.97

• The greenback recovers as stock markets struggle to maintain a positive tone.
• The looming ECB monetary policy decision keeps investors in cautious mode.
• XAUUSD approaches the $1,700 level and gains bearish traction in the near term.

XAUUSD trades marginally lower on Wednesday as the greenback recovers its poise. The bright metal, however, remains within familiar levels and confined to a tight intraday range above the $1,700 threshold. The market’s optimism faded mid-European session, resulting in European equities ending the day in the red. Wall Street, however, is struggling to retain modest intraday gains but at least has reverted early losses.

The greenback preserves modest gains across the board, although caution prevails ahead of the European Central Bank monetary policy decision. News that European policymakers would discuss a potential 50 bps rate hike has supported the shared currency. However, the Union faces turmoil amid gas shortages due to its conflict with Russia.

Meanwhile, US government bond yields fluctuate around their opening levels. The yield curve remains inverted as speculative interest fears an economic setback in the foreseeable future. The yield on the 10-year Treasury note currently stands just above 3%, while that on the 30-year note hovers around 3.20%.

Gold Price short-term technical outlook

The XAUUSD pair is trading at the lower end of its weekly range, with the risk skewed to the downside. The daily chart shows that technical indicators remain flat within oversold readings as the bright metal develops below all of its moving averages. The 20 SMA has extended its slump, and currency provides dynamic resistance at around $1,760.

In the 4-hour chart, technical readings hint at a bearish continuation. The pair trades below a flat 20 SMA, while the longer ones head firmly lower far above the shorter one. At the same time, technical indicators are gaining bearish traction within negative levels, in line with a new leg south. The YTD low comes at $1,697.56, the level to break to confirm a steeper decline.

Support levels: 1,697.50 1,685.40 1,677.00

Resistance levels: 1,714.45 1,727.20 1,736.70

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