- Gold price holds the lower ground as US Treasury yields sit at the two-year top.
- Bets of more than 25-bps Fed rate hike March weigh on non-interest-bearing gold.
- Gold price remains vulnerable while within a symmetrical triangle on the 4H chart.
Gold price fell to a fresh five-day low of $1,807 on Tuesday, having faced rejection once again above $1,820. Sellers took over complete control after the US Treasuries got sold-off into aggressive Fed’s tightening bets, as the yields spiked across the curve. The benchmark 10-year US rates jumped to the highest level since January 2020, as investors reacted to Fed Governor Christopher Waller’s comments delivered on Friday. Waller said that he rules out a 50-basis point (bps) rate hike in March, which made markets speculate that some of the Fed policymakers did discuss a 50-bps lift-off. The return of the full market exaggerated the moves in the yields and gold price. Aggressive Fed rate hike expectations, however, weighed on the Wall Street sentiment, checking gold’s downside. Additionally, concerns over surging Omicron covid variant cases globally also helped gold price find a floor well above the $1,800 mark.
Gold price is attempting a tepid bounce so far this Wednesday, as the Treasury yields halt their latest leg higher, with the risk-off sentiment persisting at full steam. The US dollar eases across the board, lending some support to the bullion. The rebound in gold price appears shallow, as the yields and the dollar will continue to hold the upper hand amid the Fed speculation. Swap markets are already pricing in over 25 bps of tightening by the end of March. The sentiment around the yields will dominate markets in the day ahead, in absence of any high-tier US economic data on Wednesday. Meanwhile, the US housing data could offer some trading impetus to gold traders.
Gold Price Chart - Technical outlook
Gold: Four-hour chart
As observed on the four-hour chart, gold price is challenging the critical 100-Simple Moving Average (SMA) support at $1,811.
The Relative Strength Index (RSI) is inching lower below the midline, suggesting that there is more room for the downside.
A sustained move below the 100-DMA will fuel a fresh decline towards the rising trendline support at $1,806.
Gold price will chart a symmetrical triangle breakdown on a four-hourly candlestick closing below the latter, opening floors for a test of the upward-sloping 200-SMA at $1,800.
The last line of defense for gold buyers is seen at the January 10 lows of $1,790.
On the flip side, recapturing the bullish 50-SMA at $1,814 is critical for attempting any meaningful recovery.
The downward-pointing 21-SMA at $1,818 will then get tested, above which the falling trendline resistance at $1,821 will be eyed.
Further north, the previous day’s high of $1,823 will act as the next relevant upside barrier.
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
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone
GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the Bank of England will begin the rate-cut cycle this year.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.