• Gold Price recovers from Friday’s slump but not out of the woods yet.
  • Holiday-thinned trading could trigger fresh validity around the bright metal.
  • The daily technical setup suggests that the downside remains favored for XAUUSD.

Gold Price is recovering from a roughly $20 fall seen on Friday, as the US Treasury yields retreat across the curve, lifting off the bullish pressure on the dollar. The market mood remains upbeat amid Beijing and Shanghai covid easing while a slowdown in the Chinese services sector downturn also helped investors stay hopeful. The return of risk-on flows added to the dollar pullback, boding well for the USD-priced precious metal.

The so-called inflation hedge, gold, also capitalized on the latest upswing in oil prices, as it re-ignited inflation worries. The output pump by the OPEC and its allies (OPEC+) seems to have done little to stem the upsurge in oil prices, which was triggered by news that US President Joe Biden’s trip to Saudi Arabia got postponed. Also, reports that Saudi hiked oil prices, boosted the black gold.

Amidst holiday-thinned liquidity likely to play out in the day ahead, XAUUSD will remain at the mercy of risk trends and the Fed expectations, which will impact the dollar valuations. Thinner liquidity could exaggerate the price action in gold price, as well.

In absence of first-tier economic releases on Monday, investors will continue assessing the upbeat US NFP and wage growth numbers, which fuelled the dollar recovery on Friday while the Wall Street indices tanked. The stronger-than-expected headline payrolls print revived aggressive Fed tightening expectations, knocking the non-interest-bearing gold price.

Gold Price Chart: Daily chart

Despite the renewed upside, the daily technical setup continues to paint a bearish picture for gold price.

The bearish 50-Daily Moving Average (DMA) is set to cross the horizontal 100-DMA for the downside. If that happens, it will confirm a bear cross, reviving the selling interest in the metal.

With a strong support at $1842, the confluence of the bearish 21-DMA and horizontal 200-DMA will be put at risk.

Acceptance below the latter on a daily closing basis will call for a test of the previous week’s low of $1,829.

Further south, the $1,820 round figure will likely guard the downside.

The 14-day Relative Strength Index (RSI) remains below the midline but attempts an advance, justifying the rebound in the price.

 If buyers manage to extend control, then a retest of the $1,860 level will be in the offing. The next significant bullish target is aligned at the end of May highs around $1,870.

Friday’s high at $1,874 will be a tough nut to crack for XAU 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.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD rebounds above 1.0300 as dollar resumes post-US CPI decline

EUR/USD rebounds above 1.0300 as dollar resumes post-US CPI decline

EUR/USD has jumped back above 1.0300 amid fresh weakness in the US dollar. Risk sentiment regains traction despite the US-Sino tensions and China's covid woes. Investors reassess the US inflation data and its impact on Fed rate hike expectations.


GBP/USD recaptures 1.2200 ahead UK ministers’ meeting with energy firms

GBP/USD recaptures 1.2200 ahead UK ministers’ meeting with energy firms

GBP/USD is paring losses to trade above 1.2200 in early European trading. The US dollar sees renewed selling amid the return of risk flows. The safe-haven dollar fails to capitalize on China-linked concerns. The UK ministers will meet major energy firms amid a deepening energy crisis. 


Gold: Sellers poke $1,784 support on Fed, China jitters

Gold: Sellers poke $1,784 support on Fed, China jitters

Gold price holds lower grounds around intraday bottom near $1,780, as bears attack the 50-DMA heading into Thursday’s European session. The precious metal respects the US dollar’s latest rebound amid mixed concerns surrounding the Fed's next move and China.

Gold News

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price shows a resilience that has not only kept it above a significant support level but also managed to slowly catalyze a move that could result in a 60% upswing.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!