• Gold price is meandering near three-week lows as King USD reigns supreme.
  • Re-pricing of Fed expectations to drive the market, with eyes on Jackson Hole.
  • XAU/USD’s daily technical setup opens the floor for a test of the $1,700 mark.

Gold price is licking its wounds, hovering close to three-week lows near $1,750, as the US dollar continues to capitalize on risk-off flows. The underlying central theme at the end of the week remains re-pricing of Fed rate hike expectations, especially after upbeat US Jobless Claims and Philly Fed Manufacturing Index reported a day before. Also, the Fed sentiment will hold the key to progressing towards the much-awaited Jackson Hole Symposium, scheduled next week. The probability of a 75 bps September rate hike now stands at 41%, up from 38% seen on Thursday, the CME Group’s FedWatch tool shows.

Meanwhile, the greenback is sitting at the highest level in a month near 107.70 against its major rivals, cheering the recent Fed commentary, where policymakers discussed the need for further interest rate hikes.  San Francisco Fed President Mary Daly reiterated that it was way too early to declare victory on inflation, adding that they will continue to raise the rates to "right-size it." St. Louis Fed President James Bullard said he is leaning toward supporting a third straight 75-basis-point interest rate hike in September while Kansas City Fed President Esther George said she and her colleagues would not stop tightening policy until they are "completely convinced" that overheated inflation is coming down.

Also read: Gold Price Forecast: Bearish breakout underway

Looking ahead, the US economic calendar remains data-empty on the week's final trading day, leaving investors to reassess the cautious Fed minutes and the recent data flow. As mentioned above, it will be all about the Fed tightening expectations, with downside seemingly more likely for the bright metal, well-backed by the bearish technical setup on the daily chart.

Gold price technical outlook: Daily chart

Earlier this week, the rising wedge breakdown confirmed on the daily chart keeps the downside open for gold bears.

Thursday’s close below the bullish 21-Daily Moving Average (DMA), now at $1,766, added credence to the bearish potential.

At the time of writing, the 14-day Relative Strength Index (RSI) points lower below the midline, suggesting that there is more for sellers to flex their muscles.

A sustained move below the $1,750 psychological level will be on their radars to aim for the next downside target near the $1,730 region.

Conversely, acceptance above the 21 DMA is crucial to initiate any meaningful recovery. However, the bearish 50 DMA at $1,774 will be a tough nut to crack for bulls.

Fresh buying opportunities above the latter could warrant a retest of Wednesday’s high at $1,782.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

Disappointing Australian data and a deteriorated market mood weighed on AUD/USD, quickly approaching the 2022 low at 0.6362. RBA’s Financial Stability report coming up next.

AUD/USD News

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

The American dollar maintains a strong upward momentum amid renewed inflation and recession concerns. EUR/USD further retreated after failing to regain parity mid-week.

EUR/USD News

Gold struggling to retain its bullish strength

Gold struggling to retain its bullish strength

XAUUSD shed some ground on Thursday, currently hovering around $1,713.00. The dollar has gathered momentum as Wall Street opened in the red, holding into negative territory at the time. Also, government bond yields resumed their advances and hold near fresh weekly highs.

Gold News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

The crypto market displays mixed signals but hints that the bearish trend is not over yet. Adopting a get-in-get-out mentality may be the more favorable approach for investors looking to expose themselves to the market.

Read more

US September NFP Preview: Analyzing gold's reaction to NFP surprises Premium

US September NFP Preview: Analyzing gold's reaction to NFP surprises

Historically, how impactful has the US jobs report been on gold’s valuation? In this article, we present results from a study in which we analyzed the XAUUSD pair's reaction to the previous 26 NFP prints.

Read more

Majors

Cryptocurrencies

Signatures