- Gold bull’s lifted the yellow-metal shy of the YTD low at around $1780.
- A wobble sentiment boosts gold prices in tandem with the greenback.
- Gold Price Forecast (XAU/USD): Will remain bearish, below a two-year-old upslope trendline, unless bulls reclaim the previously-mentioned.
Gold spot (XAU/USD) recovers some ground after slipìng below the $1800 mark on Friday, on higher US Treasury yields, which during the session are sliding, thus lifting the prospects of the non-yielding metal. XAU/USD is trading almost flat, around $1811.02 a troy ounce at the time of writing.
Sentiment-wise, the rhetoric of the last couple of weeks remains, with European and US equity bourses split between gainers and losers. The Federal Reserve’s aggressive tightening expectations, China’s Covid-19 lockdowns, and high inflationary pressures spurred by the ongoing war in Ukraine remain on investors’ radar.
Meanwhile, the yellow metal has benefited from lower US Treasury yields, with the 10-year benchmark note down five basis points, sitting at 2.88%, a headwind for the greenback. The US Dollar Index, a measurement of the buck’s value, is gaining 1.26%, sitting at 104.517, but without weighing on gold.
In the mid-North American session, money market futures have priced in a 100% chance of a 50-bps increase by the Fed in the June meeting. Earlier in the day, the New York Fed President John Williams said that the number one issue is inflation, and it is running far too high and stubbornly persistent. Williams stated that 50-bps rate hikes make sense at upcoming meetings and added to the rhetoric of central bank policymakers that China’s struggling with the coronavirus and Ukraine’s war are the significant drivers of market volatility.
Elsewhere, China continues struggling with Covid-19 as its Industrial Production shrank by 2.9, lower than the 0.4 growth expected, its lowest reading since March 2020. Despite the previously-mentioned, a ray of hope shows in the window, as Shanghais is about to gradually begin reopening businesess, including shopping malls and the manufacturing hub. Contrarily Beijing will extend work from home guidance in several districts.
In the week ahead, the US docket would feature Fed Chief Jerome Powell, St. Louis President James Bullard, and Chicago’s Fed President Charles Evans. Data-wise, April’s Retail Sales, Industrial Production, Building Permits, and Initial Jobless Claims would shed some light regarding the actual economic status of the United States.
Gold Price Forecast (XAU/USD): Technical outlook
Interestingly, the Gold Price jumped near the YTD low at around $1786 and is forming a “gravestone doji,” which is perceived as a signal of “indecision.” Also, it’s worth noting that an almost-two-year-old upslope trendline, previous support, has been broken. Unless gold bulls reclaim the aforementioned, XAU/USD is vulnerable to further downward pressure.
If XAU/USD’s bulls reclaim the upslope trendline, they will find resistance levels around the 200-DMA at $1837, followed by May 3 cycle low at $1850, and then the $1890 barrier.
On the flip side, XAU/USD’s first support would be $1800. Break below would expose May 16 daily low at $1786, followed by the YTD low at $1780 and then December’s 15 cycle low at $1752.35.
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.
Recommended content
Editors’ Picks
EUR/USD eases below 1.0850 on renewed USD strength
EUR/USD stays under pressure and trades in the red below 1.0850 in the European session. Although the ZEW survey for Germany and the Eurozone showed a noticeable improvement in economic sentiment, broad USD strength doesn't allow the pair to gain traction.
GBP/USD drops below 1.2700 on notable US Dollar demand
GBP/USD is extending the downside below 1.2700 in the European trading hours on Tuesday. The ongoing bullish momentum in the US Dollar, despite sluggish US Treasury bond yields, undermines the pair. Mid-tier US housing data are coming up next.
Gold price struggles to lure buyers, holds steady above one-week low ahead of FOMC meeting
Gold price ticks lower amid reduced Fed rate cut bets, elevated US bond yields and stronger USD. Geopolitical tensions could lend some support to the safe-haven XAU/USD and help limit losses.
Why is the crypto market crashing?
The two most important contribution to the ongoing bull market is the meteoric rise in Bitcoin due to the ETF approval and the sudden interest spike in Solana ecosystem. But the recent move suggests that the upward momentum is dissipating and a correction looms.
Canada CPI Preview: Inflation pickup could scale back bets on early interest-rate cut
The Canadian Consumer Price Index is expected to have risen by 3.1% YoY in February. The BoC shows no rush to lower its interest rate. The Canadian Dollar maintains its multi-day lows against the US Dollar around 1.3540.