• Gold Price remains heavy below $1,900 amid persistent US dollar strength.
  • US Q1 GDP awaited but it is unlikely to deter the Fed’s tightening outlook.
  • XAUUSD tests 100-DMA, with more downside exposed towards $1,850.  

Gold Price resumed its downtrend on Wednesday, reversing Tuesday’s temporary pullback, as the buying interest around the US dollar remained unabated amid varied factors. Gold Price hit the lowest level in two months at $1,881, having failed to resist above the $1,900 mark. In doing so, the bright metal lost $20, yielding a close below the March 29 low, as investors sought refuge in the safe-haven dollar, in the wake of a slump in the euro, as well as, the yen on regional issues. The Russia-Europe energy crisis smashed the euro, as the Russian government blackmailed Poland and Bulgaria with gas supplies cut off until they pay in roubles while the EU pledged a coordinated response.

On the yen side of the story, markets widely expected the Bank of Japan (BOJ) to stick with its ultra-dovish monetary policy stance, which battered the local currency, collaborating with the upside in the dollar. The US dollar index reached fresh five-year highs at 103.28, up over a big figure on the day. Meanwhile, risk sentiment somewhat stabilized, as the Wall Street indices staged a modest bounce, which also exacerbated the pain in XAUUSD.

Heading into the US Q1 GDP showdown, Gold Price is licking its wounds near fresh two-month lows near $1,880. The greenback remains elevated at multi-year highs before resuming the next upswing. Meanwhile, the market mood remains buoyed by Shanghai's reopening optimism and on reports that EU energy firms are preparing to pay for gas in roubles. The US Treasury yields are finding bids amid underlying expectations of more aggressive Fed rate hikes, as attention turns towards the all-important preliminary release of the US Q1 growth figures. The American economy is seen expanding 1.1% QoQ in Q1 vs. 6.9% previous. The US GDP data is unlikely to deter the Fed’s rate hike path, which is likely to keep the downbeat tone around Gold Price intact going forward. -

Gold Price Chart: Daily chart

Gold’s daily chart shows that Wednesday’s sell-off has breached the rising trendline support at $1,901 convincingly, opening floors for more declines in the coming days.

The 14-day Relative Strength Index (RSI) is pointing lower below the midline, suggesting that the downside potential remains in place.

Adding credence to the negative bias is a bear cross validated on the said time frame, as the 21-Daily Moving Average (DMA) cut the 50-DMA for the downside.

The immediate support of the rising 100-DMA at $1,876 appears at risk, below which the February 17 low of $1,868 remains on sellers’ radars.

A fresh downswing could be kicked off below the latter, exposing the $1,850 psychological level.

On the flip side, if the 100-DMA support holds, then a brief pullback towards the March 29 low of $1,890 will be inevitable.

The next critical barrier for bulls aligns at $1,900, above which the previous day’s high of $1,907 could be challenged again.

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

EUR/USD falls below 1.0500 after US NFP data

EUR/USD falls below 1.0500 after US NFP data

EUR/USD dropped below 1.0450 but managed to stage a modest rebound. The US Dollar preserves its strength against its rivals and doesn't allow the pair to gain traction after the data from the US showed that Nonfarm Payrolls rose by 263,000 in November.

EUR/USD News

GBP/USD turns south on upbeat US jobs report, trades below 1.2200

GBP/USD turns south on upbeat US jobs report, trades below 1.2200

GBP/USD lost nearly 100 pips with the immediate reaction to the upbeat November jobs report from the US and broke below 1.2200. The US Dollar Index clings to strong daily gains above 105.00 after the data showed that Nonfarm Payrolls rose by 263,000.

GBPUSD News

Gold retreats below $1,790 as US yields surge on US NFP

Gold retreats below $1,790 as US yields surge on US NFP

Gold price turned south and dropped below $1,790 in the early American session. The benchmark 10-year US Treasury bond yield is up more than 2% on the day near 3.6% after the bigger-than-expected November job growth, weighing heavily on XAU/USD.

Gold News

FTX exchange collapse, loss of $3.1 billion could have been avoided on one condition

FTX exchange collapse, loss of $3.1 billion could have been avoided on one condition

FTX exchange, founded by Samuel Bankman-Fried (SBF), has consistently made headlines over the past month for its liquidity crisis and triggering a collapse in the crypto ecosystem.

Read more

AMC advances more than 3% in premarket day after being halted

AMC advances more than 3% in premarket day after being halted

AMC stock is up 3.4% in Friday's premarket just a day after authorities halted trading due to unusual volatility. Thursday saw options volume three times higher than the 20-day average.

Read more

Majors

Cryptocurrencies

Signatures