Gold Price Forecast: XAUUSD remains exposed to $1,880 on hawkish Fed bets

Gold Price is catching a sigh of relief after a three-day turmoil, which smashed XAUUSD to the lowest level since March 29 at $1,892. The renewed uptick in Gold Price could be viewed as a ‘dead cat bounce’ or ‘sell the bounce’ trade, as the US dollar is likely to resume its uptrend to clinch fresh two-year highs on China’s covid concerns and hawkish Fed hike bets. Rising worries over the economic impact of China's COVID-19 lockdowns will likely underpin the greenback's safe-haven appeal and aggressive US interest rate hike expectations will keep the US Treasury yields elevated.

Amidst the dynamics of the dollar and yields, attention may also turn towards a set of top-tier US economic releases, in the form of Durable Goods Orders and CB Consumer Confidence data. It’s a blackout period for the Fed speakers this week, therefore, the upcoming US macro news and rate hike expectations will continue to affect the dollar valuations, in turn, Gold Price.

Gold Price wilted on Monday, down nearly $32 on the day, as global growth fears and an increasingly hawkish Fed spooked investors and boosted the risk-off flows into the US dollar. Fresh concerns over the spread of the covid outbreak to China’s capital Beijing and fears over a potential lockdown in the city intensified the downbeat mood. The bond market drew safe-haven flows, which knocked down the yields across the curve but failed to inspire Gold bulls. The rebound in the Wall Street indices exacerbated the pain in Gold Price. US stocks staged a decent comeback, led by tech shares as Twitter accepted Elon Musk's takeover bid.

Gold Price Chart: Daily chart

Gold’s daily chart shows that the 14-day Relative Strength Index (RSI) is seeing an uptick, which is correlating to the bounce in XAUUSD, thus far.

The leading indicator, however, lurks below the midline, suggesting that the recovery path could be shallow.

Also, the critical 21-Daily Moving Average (DMA) is approaching the 50-DMA from the upside. If the 21-DMA cuts the 50-DMA for the downside, it will revive the bearish interest in Gold Price.

Therefore, any recovery attempts appear limited near $1,935, the confluence of the previous day’s high, 50 and 21-DMAs.

If XAU bulls remain resilient to the bearish odds, then a retest of the $1,950 psychological level will be inevitable.

Alternatively, if the selling spiral resumes, then bears will challenge the previous day’s low of $1,892 once again.

The last line of defense for gold bulls will be the February 24 low of $1,878 before the ascending 100-DMA support gets exposed.