Gold Price Analysis: XAU/USD slides to $1,810s, eyes annual lows after fourth successive weekly decline

Gold prices continue to trade with a negative bias in the upper $1,810s as the buck remains resilient.
XAU/USD looks on course to post its fourth successive weekly decline and worst weekly performance since June 2021.
With the 200-DMA broken, technicians are eyeing support in the form of annual lows around $1,780 as the next target.

Joel Frank Independent Analyst

Spot gold (XAU/USD) prices continue to trade with a negative bias on the final trading day of the week, having hit their lowest levels in more than three months just above $1,810 earlier in the session. At current levels in the upper $1,810s per troy ounce, gold is trading about 0.2% lower and looks on course to post a weekly loss of around 3.5%, which would mark a fourth successive week in the red and gold’s worst weekly performance since June 2021.

The main driver of gold weakness this week has been the strength of the US dollar, with the Dollar Index (DXY) looking on course to close out the week close to multi-decade highs in the upper 104s. A stronger US dollar makes USD-denominated commodities like XAU/USD more expensive for international buyers.

The buck’s resilience on Friday comes despite a rebound in risk appetite which has seen stocks and cryptos rally, arguably burnishing gold’s safe-haven appeal. Price action in US bond markets has also been unfavourable for the precious metal this week. While nominal yields (though higher on Friday) look set to end the week substantially lower, real yields are little changed.

That means lower inflation expectations (to be exact, 10-year breakevens have fallen over 20 bps this week to under 2.70%, their lowest since early March), imply a reduced demand for inflation protection. This hurts gold, given the asset is often seen as a hedge against inflation.

Fed chair Jerome Powell’s remarks on Thursday didn’t seem to rock the boat much. He reiterated that he sees 50 bps rate hikes at upcoming meetings as appropriate. Looking ahead on Friday, gold traders will be watching the release of the US University of Michigan Consumer Sentiment survey for May at 15:00 BST for insights as to how US consumers are holding up in the face of still sky-high inflation.

Any fresh commentary from Fed speakers that might move the needle regarding tightening expectations would also be worth noting. With XAU/USD having broken below its 200-Day Moving Average on Thursday, many technicians predict further downside towards annual lows in the $1,780 area.

XAU/Usd

Overview
Today last price	1817.63
Today Daily Change	-4.19
Today Daily Change %	-0.23
Today daily open	1821.82

Trends
Daily SMA20	1898.2
Daily SMA50	1929.29
Daily SMA100	1883.58
Daily SMA200	1835.98

Levels
Previous Daily High	1858.9
Previous Daily Low	1821.38
Previous Weekly High	1909.83
Previous Weekly Low	1850.44
Previous Monthly High	1998.43
Previous Monthly Low	1872.24
Daily Fibonacci 38.2%	1835.71
Daily Fibonacci 61.8%	1844.57
Daily Pivot Point S1	1809.17
Daily Pivot Point S2	1796.51
Daily Pivot Point S3	1771.65
Daily Pivot Point R1	1846.69
Daily Pivot Point R2	1871.55
Daily Pivot Point R3	1884.21

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

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