Gold Price Forecast: XAU/USD eyes $1,950 as US Dollar Index cracks, US Q4 GDP eyed

Gold price is looking to test the $1,950.00 resistance amid volatility in the USD Index.
A pause in BoC’s policy tightening conveys that major central banks are near to the terminal rate.
More-than-projected contraction in the US Q4 GDP might accelerate recession fears.

Sagar Dua FXStreet

Gold price (XAU/USD) is aiming to test the $1,950.00 resistance for the first time in the past nine months as the US Dollar Index has faced immense pressure. The precious metal displayed a vertical rally after dropping to near $1,920.00amid rising hopes that the Federal Reserve (Fed) has no other option than to announce a smaller interest rate hike ahead. Also, a pause announced in the policy tightening by the Bank of Canada (BoC) has conveyed a message that major central banks have reached to the terminal rate.

The US Dollar Index (DXY) has dropped to near seven-month low of around 101.20 and a downside break will trigger massive selling from the market participants. S&P managed to recover losses, portrayed optimism in the market and dips are being capitalized as a buying opportunity in the risk-perceived assets by the market participants. The 10-year US Treasury yields dropped to 3.44%.

For further guidance, investors will keep an eye on the release of the preliminary United States Gross Domestic Product (GDP) data for the fourth quarter of CY2022. As per the projections, the annualized GDP is seen lower at 2.6% vs. the prior release of 3.2%. An expression of a contraction in overall economic activities might accelerate recession fears on a broader basis.

Gold technical analysis

Gold price is in a strong uptrend forming higher highs and higher lows on a daily scale. The precious metal has witnessed three consecutive buying tails, which indicates that the market participants are buying the dips with immense interest. On a broader note, horizontal support plotted from June 13 high at $1,879.26 will be a cushion for the Gold price.

The 10-and 20-period Exponential Moving Averages (EMAs) at $1,924.74 and $1,895.26 respectively are aiming higher, which signals more upside ahead.

Also, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the bullish momentum is active.

Gold daily chart

XAU/USD

Overview
Today last price	1945.96
Today Daily Change	8.01
Today Daily Change %	0.41
Today daily open	1937.95

Trends
Daily SMA20	1878.11
Daily SMA50	1818.87
Daily SMA100	1748.69
Daily SMA200	1775.67

Levels
Previous Daily High	1942.57
Previous Daily Low	1917.19
Previous Weekly High	1937.57
Previous Weekly Low	1896.63
Previous Monthly High	1833.38
Previous Monthly Low	1765.89
Daily Fibonacci 38.2%	1932.87
Daily Fibonacci 61.8%	1926.89
Daily Pivot Point S1	1922.57
Daily Pivot Point S2	1907.19
Daily Pivot Point S3	1897.19
Daily Pivot Point R1	1947.95
Daily Pivot Point R2	1957.95
Daily Pivot Point R3	1973.33

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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