- Gold Price sitting at three-month troughs just above $1,850.
- US dollar’s repositioning ahead of the Fed may offer a reprieve to gold bulls.
- Daily technical setup suggests XAU/USD could bounce before the next downswing.
Gold Price is licking its wounds near three-month lows just above the $1,950 psychological barrier, unable to find a convincing motive to stage a comeback. The US dollar has stalled its corrective pullback and heads back towards multi-year highs, keeping gold bulls at bay. The latest leg up in the dollar could be attributed to the ongoing uptrend in the US Treasury yields. The benchmark 10-year US rates briefly recaptured the 3% key level, as the Fed is set to begin its two-day monetary policy meeting later this Tuesday. The world’s most powerful central bank is widely expected to hike the key policy rate by 50 bps when it concludes its policy meeting on Wednesday. Speculative interests are now calling for a 75 bps rate hike at its June announcement.
Looking forward, the US dollar could extend its correction, as investors resort to repositioning ahead of the all-important Fed event. Further, markets weigh the downbeat US ISM and S&P Global Manufacturing PMI reports, which could keep the sentiment around the greenback undermined. The US calendar remains light this Tuesday, with the only JOLTs job openings data of relevance. The Fed expectations, however, will continue to drive the gold price action.
Gold Price Chart: Daily chart
The daily chart shows that Gold Price is finding some bids in the $1,950 area, which could prompt a comeback towards the daily highs of $1,867.
The $1,870 round figure could then be next on buyers’ radars. Acceptance above the latter will fuel a fresh advance towards the mildly bullish 100-Daily Moving Average (DMA) at $1,879.
The 14-day Relative Strength Index (RSI) has turned flat just above the oversold region, suggesting that a rebound could be in the offing.
With the hawkish Fed bets, however, in play, any recovery attempts are likely to be temporary.
If the $1,950 level gives way amid a selling resurgence, then a sharp sell-off towards the rising 200-DMA at $1,834 will be inevitable.
Ahead of that, the $1,940 level could come to the rescue of gold bulls.
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.
Recommended Content
Editors’ Picks
USD/JPY holds near 155.50 after Tokyo CPI inflation eases more than expected
USD/JPY is trading tightly just below the 156.00 handle, hugging multi-year highs as the Yen continues to deflate. The pair is trading into 30-plus year highs, and bullish momentum is targeting all-time record bids beyond 160.00, a price level the pair hasn’t reached since 1990.
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.