• Gold languished near a two-week low amid the prospects for aggressive Fed rate hikes.
  • Recession fears, sliding US bond yields, modest USD weakness extended some support.
  • The recent repeated failures near the 200-day SMA support prospects for further losses.

Gold traded with a mild negative bias for the fourth successive day on Thursday and languished near a two-week low touched the previous day. The XAUUSD was last seen hovering around the $1,816 region and was pressured by the prospects for more aggressive rate hikes by the Fed.

Speaking at the ECB's annual forum on Wednesday, Powell said that the US economy is well-positioned to handle tighter policy and that the US central bank remains focused on getting inflation under control. Adding to this, Cleveland Fed President Loretta Mester said that policymakers should act forcefully to curb price pressures. This, in turn, was seen as a key factor that continued acting as a headwind for the non-yielding gold.

That said, a combination of factors held back traders from placing aggressive bearish bets and limited any deeper losses for the XAUUSD. at least for the time being. Despite the Fed's hawkish outlook, the US dollar struggled to capitalize on its two-day-old positive trend amid the ongoing decline in the US Treasury bond yields. This, along with the prevalent risk-off mood, offered some support to the safe-haven gold amid recession fears.

The market sentiment remains fragile amid concerns that rapidly rising interest rates and tighter financial conditions would pose challenges to global economic growth. This continued weighing on investors' sentiment, which was evident from a sea of red across the equity markets and underpinned traditional safe-haven assets.

The mixed fundamental backdrop warrants some caution before positioning for any further depreciating move, through the technical set-up favours bearish traders. The recent attempted recovery moves have repeatedly faced rejection near the very important 200-day SMA and suggest that the bearish trend for gold prices might still be far from over.

Market participants now look forward to the US economic docket, featuring the Core PCE Price Index - the Fed's preferred inflation gauge - and the usual Weekly Initial Jobless Claims. This, along with the US bond yields, will influence the USD price dynamics. Apart from this, the broader risk sentiment might provide a fresh impetus to gold.

Technical levels to watch

XAU/USD

Overview
Today last price 1815.96
Today Daily Change -1.67
Today Daily Change % -0.09
Today daily open 1817.63
 
Trends
Daily SMA20 1838.05
Daily SMA50 1852.77
Daily SMA100 1891.98
Daily SMA200 1844.92
 
Levels
Previous Daily High 1833.11
Previous Daily Low 1812.09
Previous Weekly High 1847.95
Previous Weekly Low 1816.99
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1820.12
Daily Fibonacci 61.8% 1825.08
Daily Pivot Point S1 1808.78
Daily Pivot Point S2 1799.92
Daily Pivot Point S3 1787.76
Daily Pivot Point R1 1829.8
Daily Pivot Point R2 1841.96
Daily Pivot Point R3 1850.82

 

 

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