- The Gold Price is set to finish the week with losses of almost 2%.
- US central bank’s hawkish chatters and rising US Treasury yields weighed on the yellow metal.
- Nomura predicts two 75-bps rate increases by the Fed in June and July of 2022.
- Gold Price Forecast (XAUUSD): A daily close below $1930 could pave the way for Gold Prices toward $1889.
The Gold Price remains downward pressured in the mid-New York session, threatening to break a two-month-old upslope support trendline, which passes on top of the 50-day moving average (DMA) near the $1930-40 area. Factors like continuing hawkishness expressions by Fed officials and higher US Treasury yields weighed on the precious metal price, as XAUUSD is falling some 0.90%, trading at $1933.90 a troy ounce at the time of writing.
US Treasury yields rise and weighed on gold on Fed official's comments
Global equities reflect a dampened market mood. Wall Street’s indices record losses between 1.77% and 2.07%, while the US 10-year benchmark note is almost flat at 2.910%. The US Dollar Index, a measurement of the greenback’s value against six peers, edges up 0.59%, was last seen at 101.219, short of the YTD high at 101.331.
During the week, some Fed policymakers expressed the need for 50-bps rate hikes to the Federal Funds Rates (FFR); even a 75-bps rate hike was considered by the hawkish St. Louis Fed President Bullard. Nevertheless, the words of Fed Chair Powell, saying that a 50-bps rate hike in the May meeting “is on the table,” spooked investors, as bond yields rise, while US equities are tumbling on their worst daily loss in the week.
Elsewhere, Nomura was in the headlines with a prediction that after a 50 bps rate hike in May, the Fed would follow up with two 75 bps rate hikes in June and July. That backdrop isn’t good for Gold Prices, despite its hedging appeal in inflationary/stagflationary times. Rising interest rates mean the “opportunity cost” of holding non-yielding assets like Gold has gone up, which tends to dent demand.
The Fed now goes into blackout ahead of the 3-4 May meeting, meaning precious metals might get some respite in the days ahead from hawkish Fed-related bearish flows.
Gold Price Forecast (XAUUSD): Technical outlook
Gold is probing the confluence of a 50-DMA and a three-month-old upslope trendline. Also, it is worth noting that the Relative Strength Index (RSI) just broke below the 50-midline, a bearish signal that can exert downward pressure on XAUUSD, so a move towards March’s 29 cycle lows at $1889.91 is on the cards.
That said, the XAUUSD’s first support would be April’s 6 daily low at 1914.79. Break below would expose the psychological $1900 mark and the aforementioned $1889.91 March lows.
Key Technical Levels
|Today last price||1933.90|
|Today Daily Change||-16.49|
|Today Daily Change %||-0.85|
|Today daily open||1951.46|
|Previous Daily High||1957.7|
|Previous Daily Low||1936.83|
|Previous Weekly High||1981.59|
|Previous Weekly Low||1940.08|
|Previous Monthly High||2070.54|
|Previous Monthly Low||1890.21|
|Daily Fibonacci 38.2%||1944.8|
|Daily Fibonacci 61.8%||1949.73|
|Daily Pivot Point S1||1939.63|
|Daily Pivot Point S2||1927.79|
|Daily Pivot Point S3||1918.76|
|Daily Pivot Point R1||1960.5|
|Daily Pivot Point R2||1969.53|
|Daily Pivot Point R3||1981.37|
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