- 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.
Follow us on Telegram
Stay updated of all the news
AUD/USD recovers to 0.6700 amid upbeat mood
AUD/USD is battling 0.6700, recovering losses induced by softer Australian monthly inflation data. The US Dollar is struggling to extend the rebound amid a better market mood, as the global banking jitters ease. Focus on US data, Fedspeak.
USD/JPY approaches 132.00 amid BoJ-speak, firmer yields
USD/JPY is holding higher ground, approaching the 132.00 level early Wednesday. The pair is capitalizing on the risk-on mood and higher US Treasury bond yields amid mixed comments from the BoJ policymakers. US housing data next on tap.
Gold to extend choppy trading, awaiting a fresh catalyst Premium
Gold price has paused the previous rebound early Wednesday, as the United States Dollar (USD) seems to have found its feet following a rough start to the week. However, the underlying strength in the US Treasury bond yields so far this week could limit the Gold price advance.
This is how Arbitrum and Optimism are dragging users away from Ethereum
Arbitrum became the highlight of the month as the Layer-2 (L2) blockchain launched its native token, ARB. Since then, the L2 narrative that was once the talking point of 2022 has exploded again.
Unfazed: Confidence edges higher despite banking situation
Consumers may not love the present conditions, but a slightly more upbeat take on where things are headed was enough to give overall confidence a nudge in the right direction in March.