Gold Price Forecast: Bears retain control but need a catalyst
XAUUSD Current price: $1,836.50
- US President Joe Biden said that the country could avoid a recession.
- Wall Street is enjoying risk flows, firmly up after the long weekend.
- XAUUSD is at risk of extending its decline as sellers continue to defend the upside around $1,850.
Spot gold trades marginally lower at around $1,835 a troy ounce, little changed for a second consecutive day. The bright metal, however, posted a lower low on Tuesday, hit during European trading hours on war-related headlines. EU leaders will have another meeting this week, and there are market talks suggesting a possible new round of sanctions on Russia, this time targeting gold. Leaders are working to identify sectors that could be hit, and the bright metal is under their radar.
Meanwhile, a better market mood added to the lack of demand for the safe-haven metal. Stocks managed to post modest gains in Asia and Europe, while US indexes are firmly up. Fears of a recession seem to have receded at the moment, despite the economic scenario remaining the same. Markets’ confidence improved after US President Joe Biden said that the country could avoid a recession, referring to a transition into using electric vehicles and renewable energy, but affirmed that the country would overcome the current inflation.
Gold Price short-term technical outlook
Gold Price has struggled for direction ever since the week started. Nevertheless, the risk is skewed to the downside, according to technical readings in the daily chart. Sellers continue to reject advances around a flat 200 SMA, currently at $1.843.50, while the 20 SMA turned mildly lower just above it. Technical indicators, in the meantime, remain directionless, although within negative levels.
The 4-hour chart shows that the pair remains below all of its moving averages, while technical indicators head marginally lower within negative levels, although without enough strength to confirm a bearish continuation in the near term. Overall, the risk is skewed to the downside, yet a directional breakout seems unlikely in the near term.
Support levels: 1,825.35 1,814.70 1,803.90
Resistance levels: 1,846.00 1,853.10 1,867.25
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
