- Gold keeps the bounce off three-month low amid cautious optimism.
- DXY extends pullback from 20-year low as softer data joins Powell’s 50 bps rate hike view.
- Covid hopes from China add strength to the market’s mild risk-on mood.
- Gold Weekly Forecast: XAU/USD looks to test $1,800 with sellers retaining control
Gold (XAU/USD) picks up bids to refresh its intraday high around $1,815, extending Friday’s U-turn from a three-month low. The metal’s recent run-up could be linked to a softer USD and cautious optimism in the market amid Monday’s quiet Asian session.
That said, the US Dollar Index (DXY) remains pressured around 104.50 after taking a U-turn from a 20-year high the previous day. In doing so, the greenback gauge justifies downbeat prints of the US Michigan Consumer Sentiment Index for May backed by Fed Chair Jerome Powell’s repetition of 50 bps rate hikes concerns.
Elsewhere, hopes of easing the virus spread in China spread optimism in Asia as the latest covid update from Reuters suggests softer numbers from Shanghai. “Chinese financial hub Shanghai reported 869 new local asymptomatic coronavirus cases for May 15, down from 1,203 a day earlier. Confirmed symptomatic cases fell to 69, from 166 the previous day, data released on Monday showed,” said the news.
On the contrary, worsening geopolitical concerns in Ukraine joins the European Union’s (EU) plan for more sanctions on Russia to weigh on sentiment. Also challenging the mood are broad fears over inflation and economic growth moving forward, mainly due to the covid resurgence in China and the Russia-Ukraine tussles, not to forget tighter monetary policies.
Amid these plays, the S&P 500 Futures print mild gains after the Wall Street benchmarks rallied the previous day. Further, the US 10-year Treasury yields also extend Friday’s recovery moves, up 1.5 basis points (bps) around 2.95% by the press time.
Looking forward, investors will seek more clues to confirm the global economic challenges surrounding inflation, which in turn highlights this week’s US Retail Sales data for April. Meanwhile, qualitative catalysts mentioned above may entertain gold buyers.
Although oversold RSI conditions triggered XAU/USD rebound from the lowest levels since February, the precious metals remain below the previous key support line from August 2021, around $1,830 by the press time.
Also challenging the recovery moves is a confluence of the 200-DMA and 61.8% Fibonacci retracement of August 2021 to March 2022 upside, around $1,835.
Even if the gold prices rally beyond $1,835, a downward sloping resistance line from April 18 will challenge the bulls at around $1,865.
On the contrary, the $1,800 threshold and lows marked during January 2022, around $1,780, lure gold sellers during fresh downside.
Gold: Daily chart
|Today last price||1813.5|
|Today Daily Change||1.98|
|Today Daily Change %||0.11|
|Today daily open||1811.52|
|Previous Daily High||1828.85|
|Previous Daily Low||1799.19|
|Previous Weekly High||1885.82|
|Previous Weekly Low||1799.19|
|Previous Monthly High||1998.43|
|Previous Monthly Low||1872.24|
|Daily Fibonacci 38.2%||1810.52|
|Daily Fibonacci 61.8%||1817.52|
|Daily Pivot Point S1||1797.52|
|Daily Pivot Point S2||1783.53|
|Daily Pivot Point S3||1767.86|
|Daily Pivot Point R1||1827.18|
|Daily Pivot Point R2||1842.85|
|Daily Pivot Point R3||1856.84|
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.