Gold Price Forecast: XAU/USD eyes $1,880 as investors digest Powell’s guidance and Biden’s SOTU

Gold price is aiming to recapture $1,880.00 as the risk appetite is improving.
Investors have shrugged-off uncertainty from Powell’s speech and US Biden’s SOTU meeting.
The Fed might continue keeping rates higher for a longer period as the entire disinflationary process seems complicated.

Sagar Dua FXStreet

Gold price (XAU/USD) aims to capture the immediate resistance of $1,880.00 in the Asian session. The precious metal rebounded after dropping to near $1870.00 and is expected to add gains ahead as the risk appetite of the market participants is improving.

Investors have digested the hawkish guidance on interest rates delivered by Federal Reserve (Fed) chair Jerome Powell and US President Joe Biden’s commentary at State of the Union (SOTU).

Fed chair Jerome Powell cleared that the central bank will hike interest rates further if the labor market report continues to surprise the market on the upside. The Fed is committed to raising the inflation rate to 2%; therefore, higher interest rates will continue to stay longer.

Meanwhile, US President Joe Biden sounded tough on China, citing that “The United States is in strongest position from decades to compete with China or anyone else.”

Risk-perceived assets like S&P500 futures have ignored Powell’s hawkish commentary and US Biden’s harsh statement on China. They have recovered losses displayed in the Asian session, portraying a risk-on market mood. The US Dollar Index (DXY) is struggling to firm its feet and is expected to resume its downside journey. Also, the 10-year US Treasury yields have slipped to near 3.65%.

Gold technical analysis

Gold price is forming an Inverted Flag chart pattern on a four-hour scale, indicating a sheer consolidation, followed by a breakdown in the same. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after establishing a bearish bias.

The Gold price is also struggling to sustain above the 23.6% Fibonacci retracement (from November 11 low at $1,617.32 to February 2 high at $1,959.20) at $1,878.00.

The 20-period Exponential Moving Average (EMA) at $1,882.20 acts as a significant barricade for the Gold price.

Meanwhile, the Relative Strength Index (RSI) (14) is struggling to cross 40.00, which indicates an absence of strength in the Gold bulls.

Gold four-hour chart

XAU/USD

Overview
Today last price	1876.48
Today Daily Change	6.25
Today Daily Change %	0.33
Today daily open	1870.23

Trends
Daily SMA20	1913.83
Daily SMA50	1851.04
Daily SMA100	1770.45
Daily SMA200	1776.02

Levels
Previous Daily High	1884.49
Previous Daily Low	1865.05
Previous Weekly High	1959.8
Previous Weekly Low	1861.45
Previous Monthly High	1949.27
Previous Monthly Low	1823.76
Daily Fibonacci 38.2%	1877.06
Daily Fibonacci 61.8%	1872.48
Daily Pivot Point S1	1862.02
Daily Pivot Point S2	1853.82
Daily Pivot Point S3	1842.58
Daily Pivot Point R1	1881.46
Daily Pivot Point R2	1892.7
Daily Pivot Point R3	1900.9

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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