Gold Price Forecast: XAU/USD skids below $1,840 as geopolitical tensions dampen market mood

Gold price has slipped below $1,840.00 amid the risk-off market mood.
Escalating US-China tensions and the launch of projectiles from North Korea near Japan’s EEZ have supported the USD Index.
Fed Bowman believes that the central bank has a long way to scale down inflation to 2%.

Sagar Dua FXStreet

Gold price (XAU/USD) has slipped to near $1,837.90 after delivering a downside break of the consolidation formed in a narrow range of around $1,844.00 in the Asian session. The precious metal has been offered amid escalating geopolitical tensions between the United States and China and the launch of projectiles from North Korea near Japan’s Exclusive Economic Zone (EEZ).

Investors should brace for sheer volatility as the equity markets in the United States will remain closed on Monday due to Presidents’ Day. Meanwhile, S&P500 futures have slipped further amid rising expectations of the continuation of the restrictive policy stance by the Federal Reserve (Fed), portraying a decline in the risk-aversion theme.

The US Dollar Index (DXY) has scaled above 103.70 as investors are getting nervous that the higher-than-anticipated US Consumer Price Index (CPI), Producers Price Index (PPI), and monthly Retail Sales data have triggered the risk of a revival in the inflationary pressures.

Fed Governor Michelle Bowman said on Friday that they are seeing a lot of inconsistent data in economic conditions. He further added, the Fed has “A long way to go to get inflation back down to our goal."

Gold technical analysis

Gold price has rebounded after sensing a loss in the downside momentum on an hourly scale. The precious metal was continuously making lower lows while the Relative Strength Index (RSI) (14) made a higher low. The negative bullish divergence bolstered the case of a bullish reversal.

The Gold price has comfortably shifted its business above the 50-period Exponential Moving Average (EMA) at $1,836.42, which indicates that the short-term trend is bullish now.

Broadly, the Gold price is oscillating in a Falling Channel chart pattern. For a fresh upside, the Gold price needs to deliver a breakout of the chart pattern ahead.

Gold hourly chart

XAU/USD

Overview
Today last price	1838.92
Today Daily Change	-3.04
Today Daily Change %	-0.17
Today daily open	1841.96

Trends
Daily SMA20	1891
Daily SMA50	1861.98
Daily SMA100	1786.49
Daily SMA200	1776.05

Levels
Previous Daily High	1843.65
Previous Daily Low	1818.93
Previous Weekly High	1870.71
Previous Weekly Low	1818.93
Previous Monthly High	1949.27
Previous Monthly Low	1823.76
Daily Fibonacci 38.2%	1834.21
Daily Fibonacci 61.8%	1828.37
Daily Pivot Point S1	1826.04
Daily Pivot Point S2	1810.13
Daily Pivot Point S3	1801.32
Daily Pivot Point R1	1850.76
Daily Pivot Point R2	1859.57
Daily Pivot Point R3	1875.48

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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