Gold Price dribbles around mid-$1,800s amid sour sentiment, firmer USD ahead of US inflation

  • Gold Price retreats from intraday high while pausing two-day downtrend amid mixed clues.
  • Firmer yields, USD weigh on the metal but market’s indecision test the bears.
  • Options market flash bearish signals ahead of the key US inflation data, ECB.

Gold Price (XAUUSD) struggles to recall bulls as the metal eases back to $1,840, after a failed attempt to pause a two-day downtrend. Even so, the yellow metal remains unchanged on a daily basis heading into Tuesday’s European session.

Bears run out of steam amid sluggish markets

Even if the metal remains pressured around the weekly low, the buyers are confused amid mixed signals affecting the market’s risk appetite. Among them, the sluggish performance of Asia-Pacific shares joins the firmer US Treasury yields and downbeat S&P 500 Futures to portray the market’s mood.

Also read: Gold Price Forecast: Bearish technical structure suggests more pain ahead

Options market teases bears

Trader holding gold coin

Options market catalysts also exert downside pressure on the bullion. That said, the one-month risk reversal (RR) on the Gold Price, a spread between the calls and puts, dropped the most in a fortnight by the end of Monday, with the latest figures being -0.090, per Reuters’ data on the options market. In doing so, the XAUUSD RR also drop for the third consecutive week.

China’s optimism defends Gold Price

China Securities Journal (CSJ) praised the country’s virus control and policy stimulus while expecting economic improvement in the second half (H2) of 2022. Previously, Beijing’s ability to overcome the pandemic and citing preparations to recover from the economic loss with faster unlocks joined US President Joe Biden’s likely easy stand for China, as far as showing readiness to remove Trump-era tariffs, seemed to have favored sentiment and challenge XAUUSD bears.

US inflation, ECB remain in the spotlight

Friday’s strong US Nonfarm Payrolls (NFP) and the last dose of hawkish Fedspeak before the blackout norm have already bolstered the calls for the Fed’s 50 bps rate hike in September, to around 70% versus nearly 30% a week ago. The same highlights Friday’s US Consumer Price Index (CPI) data for May, expected 8.2% YoY versus 8.3% prior, to prove the market forecasts right and exert an additional downside burden on the Gold Price.

Additionally, the European Central Bank’s (ECB) monetary policy meeting, up for Thursday, is less likely to offer any rate change. However, the recently hawkish rhetoric among the policymakers highlights the need for the clues supporting the July rate hike, which in turn might favor the gold sellers.

Gold Price technical outlook

Gold bears run out of steam inside a bearish chart pattern, namely a rising wedge. However, downbeat RSI (14), not oversold, join the metal’s failures to cross the 100 and 200-SMAs to keep the sellers hopeful.

That said, a clear downside break of the $1,840 appears necessary to confirm the rising wedge breakdown and aim for the fresh 2022 low, currently around $1,780.

Also likely to challenge the XAUUSD bears are the multiple levels around $1,830, $1,800 and May’s bottom near $1,786.

Meanwhile, the 100 and 200-SMA, respectively near $1,845 and $1,862, restrict the short-term rebound of the Gold Price.

Additionally, the upper line of the stated wedge, near $1,885, also tests the gold buyers before giving them control.

Gold gets rejected, but bulls could retry


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

AUD/USD under pressure below 0.7100 amid China concerns, USD rebound

AUD/USD under pressure below 0.7100 amid China concerns, USD rebound

AUD/USD remains pressured below 0.7100 amid fresh US-Sino trade concerns, surging China's covid cases and softening Australian inflation expectations. Investors reassess the US inflation data and its implications on the next Fed rate hike move. 


EUR/USD corrects below 1.0300 as DXY strengthens ahead of US Michigan CSI

EUR/USD corrects below 1.0300 as DXY strengthens ahead of US Michigan CSI

EUR/USD has tumbled to near 1.2850 amid a significant recovery in the DXY. A lower US CPI print has trimmed the odds of hawkish guidance while rate hike odds are solid. This week, the US Michigan CSI data will be of utmost importance.


Gold slips below $1,790 as DXY extends recovery, Michigan CSI eyed

Gold slips below $1,790 as DXY extends recovery, Michigan CSI eyed

Gold price has dropped to near $1,785.00 after surrendering the critical support of $1,788.00 in the Asian session. The precious metal has entered into a healthy correction phase after printing a fresh monthly high at $1,807.96 on Wednesday.

Gold News

XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price shows a willingness to move above a significant resistance level, which it has attempted to do so for the past three months and failed each time. While this attempt is like any other and could fail, especially if the momentum is lacking.

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!