Gold Price Forecast: XAU/USD holds in bullish territory, bulls await the RBA to potentially weigh the greenback down

Update: At $1,797.38, Gold (XAU/USD) is flat in Asia as markets consolidate before what could turn out to be a volatile set of trading days ahead for the rest of the week. The economic calendar is jam-packed with events that would be expected to move the needle in the yellow metal. 

Trading in Asian hours are expected to remain subdued with several markets on holiday for the Lunar New Year, however, the Reserve Bank of Australia could upset the peace and quiet. Expectations are building that Governor Philip Lowe will capitulate on his prior conviction that an interest rate rise this year was unlikely.

This could rock the greenback and subsequently support gold prices higher, The dollar index (DXY), which measures the greenback against six rivals, ticked 0.05% higher to 96.715, barely making a dent in Monday's 0.59% drop. It was at an almost 19-month high of 97.441 at the end of last week, as investors tried to second guess the Federal Reserve's moves for the year ahead, partially pricing in a 50 basis point rate hike in March.

End of update

Gold (XAU/USD) buyers flirt with the $1,800 threshold, keeping the previous day’s bounce off a seven-week low during a quiet Asian session on Tuesday.

In doing so, the precious metal ignores downbeat US stock futures, as well as sluggish Treasury yields, after mixed updates from the Fed and positive news over the Russia-Ukraine tussles seem to have recalled the buyers.

Having witnessed the Fed’s hawkish halt the last week, various Fed policymakers conveyed their dissatisfaction with the higher inflation and favored rate hikes in March. However, a lack of clarity on the pace of rate lift seems to have weighed on the US Dollar Index (DXY), which in turn favored gold, the previous day. Among the key Fed speakers were Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George, not to forget Federal Reserve Bank of San Francisco President Mary Daly.

Elsewhere, the Washington Post (WaPo) conveyed the news of Russian response to the US proposal over Ukraine, citing an anonymous Senior Diplomat. “The Russian government has delivered a written response to a U.S. proposal aimed at de-escalating the Ukraine crisis.” It’s worth noting that UK PM Boris Johnson is also scheduled to visit Ukraine on Tuesday whereas US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov will also hold meetings today.

In addition to the mixed Fed updates and receding pressure on the Russia-Ukraine issue, a light calendar and the market’s attention off the Fed’s hawkish communication also favored the Wall Street benchmarks to post an upbeat start to the week. The same challenged the US 10-year Treasury yields while the US Dollar Index (DXY) dropped the most in a month, which in turn backed gold buyers.

Looking forward, gold traders will keep their eyes on the US ISM Manufacturing PMI for January, expected 57.5 versus 58.7 prior, for immediate direction. However, major attention will be given to the Fedspeak and developments concerning Russia.

Read: ISM Manufacturing PMI January Preview: Fed policy counts on a continuing US expansion

Technical analysis

Gold prices hold onto the week-start bounce off 50% Fibonacci retracement (Fibo.) of August-November 2021.

Given the steady RSI and bearish MACD signals, the gold sellers are yet to convince markets before retaking controls.

This highlights a convergence of the 50-DMA and previous support line from August, near $1,802, as the nearby key resistance.

Following that, a confluence of the 200-DMA and 38.2% (Fibo.) near $1,806 will also challenge gold buyers before directing them to the December 2021 peak surrounding $1,831.

On the contrary, the aforementioned 50% Fibonacci retracement level near $1,782 restricts the quote’s immediate pullback.

Gold: Daily chart

Following that, 78.6% Fibo. on the four-hour (4H) chart near $1,773 will challenge the gold sellers before directing them to December’s low of $1,753.

It’s worth noting that the RSI and MACD conditions do favor XAU/USD buyers on the 4H, suggesting an extension of the latest recovery moves.

Gold: Four-hour chart

To sum up, gold prices are up for consolidating the Fed-led losses but the bulls have strong challenges to justify their strength.

Additional important levels

Today last price 1797.9
Today Daily Change 9.04
Today Daily Change % 0.51%
Today daily open 1788.86
Daily SMA20 1816.86
Daily SMA50 1801.84
Daily SMA100 1795.55
Daily SMA200 1805.65
Previous Daily High 1799.46
Previous Daily Low 1780.32
Previous Weekly High 1853.91
Previous Weekly Low 1780.32
Previous Monthly High 1830.39
Previous Monthly Low 1753.01
Daily Fibonacci 38.2% 1787.63
Daily Fibonacci 61.8% 1792.15
Daily Pivot Point S1 1779.63
Daily Pivot Point S2 1770.41
Daily Pivot Point S3 1760.49
Daily Pivot Point R1 1798.77
Daily Pivot Point R2 1808.69
Daily Pivot Point R3 1817.91



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 bulls seek a break of 0.6925 for 0.6950 target area

AUD/USD bulls seek a break of 0.6925 for 0.6950 target area

AUD/USD is consolidated at the start of the Asian day following some back and forth at the start of the week. The Aussie is trading at 0.6922 and will be dependent on the trajectory of the greenback in the absence of domestic data this week other than Retail Sales tomorrow. 


EUR/USD retreats from fortnight high near 1.0600 on recession/inflation fears

EUR/USD retreats from fortnight high near 1.0600 on recession/inflation fears

EUR/USD holds onto the pullback from a two-week high as bulls get rejections from short-term key resistances, as well as risk-off mood, during Tuesday’s Asian session. The major currency pair remains pressured around 1.0585.


Gold sees downside below $1,820, focus shifts to Fed Powell

Gold sees downside below $1,820, focus shifts to Fed Powell

Gold price displayed a failed attempt to sustain above the critical resistance of $1,840.00 on Monday. The precious metal has turned sideways after a sheer downside move and is expected to extend its losses after violating the crucial support of $1,820.85.

Gold News

Terra’s LUNA price finally shows the buy signal you’ve been waiting for

Terra’s LUNA price finally shows the buy signal you’ve been waiting for

Terra’s LUNA price shows optimism to start the final week of June. The potential for a new bull run is beginning to materialize. LUNA price sees an uptick in social media commentary.

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!