- Gold attempts a tepid recovery after the Yellen-induced blow.
- 4H chart shows the tide is turning once again in favor of XAU bears.
- US ADP jobs data and ISM Services PMI data eyed.
Gold (XAU/USD) showed good two-way price movements on Tuesday, settling in the red around $1780. Despite some volatility, the price of gold remained confined within its recent trading range. The metal rallied to test $1800 earlier in the day but faced rejection once again at that level and fell steeply to the $1770 support area after US Treasury Secretary Janet Yellen talked up rate hike expectations and hammered Wall Street indices. Investors scurried to the safe-haven US dollar, downing the USD-denominated commodity. However, Yellen quickly ate up her words while the Fed policymaker Neil Kashkari pour cold water on expectations of monetary policy normalization. Strong US Factory Orders data also added to the upbeat sentiment around the greenback. However, the fall in the US rates helped gold to recover towards the closing.
Gold’s rebound could gain traction if the risk recovery picks up momentum and weighs further on the dollar in the day ahead. However, upbeat US ADP jobs and ISM Services PMI could revive the bullish undertone in the US currency, limiting gold’s advance. Further, if the Wall Street slide extends into Wednesday, it could likely trigger a flight to safety, lifting the dollar’s haven demand once again.
Gold Price Chart - Technical outlook
Gold: Four-hourly chart
Looking at the four-hourly chart, gold’s recovery appears at risk, given that the Relative Strength Index (RSI) has flipped into the bearish territory, currently standing at 49.85.
The sellers have defied the odds of a potential move higher after a bull cross was spotted on the said time frame last hours. The 21-simple moving average (SMA) cut above the 50-SMA, presenting a bullish crossover.
Therefore, immediate support at $1778 appears to get tested. That level is the meeting point of the 21 and 50-SMAs.
Further south, the ascending 100-SMA at $1773 could help slow down the decline, below which Tuesday’s low of $1770 will be challenged.
On the flip side, a sustained recovery above $1884 could reinforce the uptrend towards $1800. The range play is likely to continue below $1800 unless a daily close above the latter is witnessed.
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 clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.