- Gold price has extended its recovery above the $1,750.00 hurdle as the risk-off impulse eases.
- A recovery in risk-on profile has failed to ease US Treasury yield gains.
- United States inflation will face significant heat on a slowdown in growth rate.
Gold price (XAU/USD) has extended its recovery above the immediate hurdle of $1,750.00 in the Asian session. A responsive buying action around the critical support of $1,740.00 marked a gold price recovery. The risk aversion theme is losing its grip, therefore, the US Dollar Index (DXY) has dropped sharply below 106.30.
S&P500 futures have recovered after a sell-off on Monday, indicating a recovery in investors’ risk appetite. Meanwhile, the 10-year US Treasury yields are holding their gains around 3.70%.
Chinese marshals have stopped the general public from coming to roads to weaken protests against the administration's rollback of Covid-19 lockdown measures. Although, the process is temporary, as individuals are filled with frustration and anger.
On the United States front, investors are awaiting the release of the quarterly Gross Domestic Product (GDP) data, which will release on Wednesday. The growth rate is expected to remain stable at 2.6%. Federal Reserve (Fed) policymakers brace for a slowdown in the growth rate as it will lead to a deceleration in inflation. This will support the Fed while designing a strategic plan for December’s monetary policy meeting.
Gold technical analysis
On an hourly scale, the gold price has managed to recapture the 23.6% Fibonacci retracement (plotted from November 3 low at $1,616.69 to November 15 high at $1,758.88) at $1,746.50. The downward-sloping trendline from November 16 high at $1,784.42 will act as a significant barricade for the gold bulls.
The precious metal has overstepped the 20-period Exponential Moving Average (EMA) at $1,746.00, which indicates that the short-term trend has turned positive again.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range, which signals a consolidation ahead.
Gold hourly chart
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