Gold Price Forecast: XAU/USD attempts a recovery above $1,740 as risk-on profile rebounds

Gold price (XAU/USD) sensed a decent buying interest after dropping to near $1,732.60 in the late New York session.  The precious metal has extended its recovery and is aiming to cross the immediate hurdle of $1,740.00 decisively. Traction is returning in the gold price as the risk-off impulse is losing its strength.

S&P500 futures have displayed a marginal recovery after easing on Monday. Meanwhile, the US dollar index (DXY) is oscillating around 107.70 after a correction from 108.00. The 10-year US Treasury yields are still holding their recovery to near 3.83% despite less confidence in the continuation of the current rate hike pace by the Federal Reserve (Fed).

For a decisive movement, investors are awaiting the release of the US Durable Goods Orders. As per the consensus, the economic catalyst will continue its pace of improvement at 0.4% as reported earlier. This could dent the strategic plans of fighting against inflation drawn by the Federal Reserve (Fed) as a stable demand for durable goods in times of accelerating interest rates is not a sign of declining consumer spending. It could compel the Fed to continue hiking interest rates by 75 basis points (bps).

Gold technical analysis

On a four-hour scale, the gold price is expected to attempt a mean reversion to the 23.6% Fibonacci retracement (placed from November 3 low at $1,616.39 to November 15 high at $1,786.55) at $1,746.67. The asset has dropped below the 20-and 50-period Exponential Moving Averages (EMAs) at $1,751.40 and $1,746.67 respectively, which adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead.

Gold four-hour chart