Gold Price Forecast: Firmer bearish case once below 1,756.60

Valeria Bednarik FXStreet

XAU/USD Current price: $1,789.91

US Federal Reserve set to tapper, but what about rate hikes?
Wall Street retreats from record highs, while US Treasury yields ticked higher.
XAU/USD broke lower and is currently near a critical Fibonacci support level.

Gold plummeted to $1,758.81, its lowest since October 13, now treading water in the 1,760 pare ahead of the US Federal Reserve’s announcement on monetary policy. The greenback trades with a firmer tone across financial markets, as Wall Street retreats from record highs and US government bond yields tick higher.

The US central bank is expected to announce the reduction of its pandemic-related financial support, by trimming the monthly amount of assets buying by $15 billion. Such a decision has already been priced in and could spur limited action in prices. The main focus will be on whether the mentioned figure is correct, and the future or rate hikes. Chief Jerome Powell has repeated multiple times that retrieving QE does not mean a rate hike, but the market will price in sooner hikes anyway. Any hint on the matter should boost the greenback.

Gold price short-term technical outlook

Ahead of the event, the XAU/USD pair trades near the mentioned low and has broken several support levels without looking back, and it is nearing the 61.8% retracement of its latest daily advance at 1,756.60, the immediate support level. Once below the latter, the metal is set to keep falling toward the 1,700 area, particularly with US positive surprises.

The bright metal is bearish, according to the daily chart, as it has collapsed below all of its moving averages, while technical indicators head firmly south within negative levels. The near-term picture is also bearish, as the price has broken below a flat 200 SMA, while the 20 SMA is crossing below the 100 SMA, both far above the current level. At the same time, technical indicators maintain their bearish slope, despite being at oversold levels.

Support levels: 1,756.60 1,745.20 1,733.10

Resistance levels: 1,767.40 1,778.60 1,800.60

View Live Chart for the XAU/USD

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.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.