|

Gold Price Forecast: XAUUSD breaks below $1,800, bears gearing up to challenge YTD low

  • Gold Price was dragged below the $1,800 mark at the end of the week, its lowest level since May 16.
  • Aggressive Fed rate hike bets and a goodish pickup in the USD demand exerted some pressure.
  • Recession fears and the risk-off mood did little to lend any support to the safe-haven XAUUSD.

Gold Price prolonged this week's bearish trend and witnessed heavy follow-through selling on Friday, marking the fifth successive day of a negative move. The downward trajectory extended through the early part of the European session and dragged spot prices to the lowest level since May 16, around the $1,792 region in the last hour.

Flows were driven away from gold by the prospects for more aggressive rate hikes by the US central bank. These were reaffirmed by Fed Chair Jerome Powell's remarks on Wednesday, which said that the US economy is well-positioned to handle tighter policy. Speaking at the ECB Forum in Sintra, Powell added that the Fed remains focused on getting inflation under control and the market pricing is pretty close to the dot plot. Apart from this, broad-based US dollar strength further exerted downward pressure on the dollar-denominated commodity.

This combination of factors overshadowed the prevalent risk-off environment which tends to benefit the safe-haven precious metal. The market sentiment remains fragile amid concerns that rapidly rising rates and tightening financial conditions would pose challenges to global economic growth. Adding to this, the ongoing Russia-Ukraine war has been fueling fears about a possible recession. One would have thought this would embolden gold bulls but in reality it did little to impress investors or ease the bearish pressure surrounding gold.

The anti-risk flow was reinforced by the recent slump in the US Treasury bond yields, which, again, failed to lend any support to the yellow metal. With the latest leg down, spot prices now seem to have confirmed a fresh bearish breakdown below the $1,800 round-figure mark. Furthermore, effortless acceptance below the said handle might have already set the stage for an extension of the depreciating move towards the YTD low, around the $1,780 region. The downward trajectory could now extend towards the next relevant support near the $1,755-$1,750 zone. From here, traders now look forward to the release of the US ISM Manufacturing PMI for a fresh impetus.

Technical levels to watch

XAU/USD

Overview
Today last price1792.51
Today Daily Change-14.79
Today Daily Change %-0.82
Today daily open1807.3
 
Trends
Daily SMA201834.99
Daily SMA501849.89
Daily SMA1001891.72
Daily SMA2001845.12
 
Levels
Previous Daily High1825.19
Previous Daily Low1802.79
Previous Weekly High1847.95
Previous Weekly Low1816.99
Previous Monthly High1879.26
Previous Monthly Low1802.79
Daily Fibonacci 38.2%1811.35
Daily Fibonacci 61.8%1816.63
Daily Pivot Point S11798.33
Daily Pivot Point S21789.36
Daily Pivot Point S31775.93
Daily Pivot Point R11820.73
Daily Pivot Point R21834.16
Daily Pivot Point R31843.13

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold holds above $4,000 as traders brace for Fed interest rate decision

Gold edges higher during American trading hours on Tuesday after trading in negative territory earlier in the day. A slight decline in Oil prices offers some relief, although a firmer USD limits the upside as traders await the Fed’s monetary policy announcement on Wednesday.

Crypto Today: Bitcoin, Ethereum and XRP on edge as sell-side pressure intensifies

Cryptocurrency prices are broadly correcting on Tuesday, led by Bitcoin (BTC) edging lower below the pivotal $80,000 level. Ethereum (ETH) mirrors Bitcoin’s neutral-to-bearish outlook, while Ripple (XRP) hovers around $1.30.

Experts agree: Fed policy outlook and geopolitical tensions keep US Dollar bid

The US Dollar Index rallies 0.6% in three days and hits fresh two-week highs above 102.00. Investors return to the US Dollar as markets brace for a hawkish hold by the Fed on Wednesday. Waning hopes of any immediate US-Iran peace deal have provided additional support to the safe-haven USD.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.